CFD course
CFDs on shares
With CFDs, or Contracts for Difference, an investor positions in equities.
The investor can use the CFD broker positions greater than the value of his account and so powerful a lever action. Share CFDs transactions through investor does not pay a fair tax.
We illustrate this with an example.
Suppose an investor wants to buy 10,000 shares Option International. The Ask price is 1.45 euros. The investor sends the order via its trading platform by the CFD broker.
The broker allows the order carried out by a specialist market. The CFD broker thus takes the position for the customer. The position has a value of 10,000 x 1.45 = 14,500 euros.
The CFD broker, such WH SelfInvest, requires an intraday coverage of 10% on the account. In this case, this is 1450 Euro. FYI: the CFD Broker Client Station, which is actually a white product of Saxobank offer, ask the 25% coverage on account. At Keytrade would therefore 3,625 euros on the account must have.
The price of Option International increases in our example from 1.45 to 1.50 and the investor decides to take his profit. He sends a sales order by the broker WH SelfInvest, the position closes.
The investor receives the difference, especially 10,000 x (1.50 to 1.45) = 500. For these 500 euros so he had to earn 1,450 euros will be needed in his account. The investor has a Contract for Difference = the difference for a contract with WH SelfInvest
The price of Option International rose by 3.4% but the profit (before transaction costs) for the investor is 34% on the capital employed. In fact, he had only 10% of the value of the position is required for this to be able to carry out trade. The investor can take larger positions than he has money in his account. It can therefore operate with a lever.
For your information:
The margin requirements for CFDs on shares in WH SelfInvest is 10% 20% intraday and overnight (if you so holds the position overnight). More information about the margin requirements for WH SelfInvest.
The margin requirements for CFDs on shares in Client Station is less simple and can fluctuate from 10% to 100% depending on the volatility of the underlying shares.
CFD positions can not be opened to all shares. A CFD broker is usually limited to marketable shares. The CFD offer such WH SelfInvest here.
related posts
- super adx
- download indikator
- indicator gold
- forex moving
- fibonacci analysis
