Example 1 – Share Dealing
We wish to take a Long position in Barclays in anticipation of a rise in price and wish to expose ourselves to 1000 Shares:
Notes:
- The interest rate on the CFD is calculated as follows:
Value of position = 1000 Shares x £4.43 (the Mid price) = £4430
Interest @ 5.5% p.a. of the total position = £4430 x 5.5% = £243.65 p.a.
£243.65 divided by 365 = £0.667.
(Please do check exactly how the Interest charge is computed with the providers – there will be differences). - The wider spread and higher price on the Financial Spreadbet reflects that it is a quarterly contract and takes account of Interest and Dividends.
- The profit is calculated by valuing the positions at the prevailing potential closing price of the position i.e. the Bid Price – Opening Offer price x Size of Exposure.
- Interest will accrue on the CFD Daily until the position is closed.
- No interest would have accrued had the position not been held overnight.
Example 2 – Index Trading
We wish to take a Short position on the Dow Jones Index in anticipation of a fall in price:
Notes:
- The Notional Trading Requirement on the Financial Spreadbet is usually at a fixed level e.g. 400 – you would multiply this number by your stake to calculate your Margin Requirement e.g. 400 x £10 = £4000.
- The interest rate on the CFD is calculated as follows:
Value of position = £10 Per point x 8486.5 (the latest Mid price) = £84,865
Interest @ 1.5 % p.a. of the total position = £84865 x 1.5% = £1272.97 p.a.
£1272.97 divided by 365 = £3.487.
(Please do check exactly how the Interest charge is calculated – there will be differences.) - The wider spread and higher price on the Financial Spreadbet reflects that it is a quarterly contract and takes account of Interest and Dividends.
- The profit is calculated by valuing the positions at the prevailing potential closing price of the position i.e. the Offer Price – Opening Bid Price x Size of Exposure.
- Interest will accrue on the CFD Daily until the position is closed.
Example 1 – Share Dealing
We wish to take a Long position in Barclays in anticipation of a rise in price and wish to expose ourselves to 1000 Shares:
Notes:
- The interest rate on the CFD is calculated as follows:
Value of position = 1000 Shares x £4.43 (the Mid price) = £4430
Interest @ 5.5% p.a. of the total position = £4430 x 5.5% = £243.65 p.a.
£243.65 divided by 365 = £0.667.
(Please do check exactly how the Interest charge is computed with the providers – there will be differences). - The wider spread and higher price on the Financial Spreadbet reflects that it is a quarterly contract and takes account of Interest and Dividends.
- The profit is calculated by valuing the positions at the prevailing potential
closing price of the position i.e. the Bid Price – Opening Offer price x Size of
Exposure. - Interest will accrue on the CFD Daily until the position is closed.
- No interest would have accrued had the position not been held overnight.
Example 2 – Index Trading
We wish to take a Short position on the Dow Jones Index in anticipation of a fall in price:
Notes:
- The Notional Trading Requirement on the Financial Spreadbet is usually at a
fixed level e.g. 400 – you would multiply this number by your stake to
calculate your Margin Requirement e.g. 400 x £10 = £4000. - The interest rate on the CFD is calculated as follows:
Value of position = £10 Per point x 8486.5 (the latest Mid price) =
£84,865
Interest @ 1.5 % p.a. of the total position = £84865 x 1.5% = £1272.97
p.a.
£1272.97 divided by 365 = £3.487.
(Please do check exactly how the Interest charge is calculated – there will
be differences). - The wider spread and higher price on the Financial Spreadbet reflects that it is
a quarterly contract and takes account of Interest and Dividends. - IThe profit is calculated by valuing the positions at the prevailing potential
closing price of the position i.e. the Offer Price – Opening Bid Price x Size of
Exposure. - Interest will accrue on the CFD Daily until the position is closed.
Example 1 – Share Dealing
We wish to take a Long position in Barclays in anticipation of a rise in price and wish to expose ourselves to 1000 Shares:
| Financial Spreadbet | Contract for Difference | |||
| Bid Price | £4.2935 | £4.275 | ||
| Offer Price | £4.3075 | £4.285 | ||
| Type of Contract | Quarterly | Open until Closed | ||
| Size of Exposure | £10 per point | 1000 Shares | ||
| Value of Contract | £4307.50 | £4285 | ||
| Commission (if applicable) | £0 | £10.71 (0.25%) | ||
| Margin Requirement at 10% | £430.75 | £428.50 | ||
| Price appreciates 15p and the position is held overnight. | ||||
| Bid Price | £4.4435 | £4.425 | ||
| Offer Price | £4.4575 | £4.435 | ||
| Interest Charge | £0 | £0.67 | ||
| Current Profit | 13.6 points @ £10 | 14p x 1000 Shares Less interest & Commission | ||
| Profit £’s | £136 | £128.62 | ||
Notes:
- The interest rate on the CFD is calculated as follows:
Value of position = 1000 Shares x £4.43 (the Mid price) = £4430
Interest @ 5.5% p.a. of the total position = £4430 x 5.5% = £243.65 p.a.
£243.65 divided by 365 = £0.667.
(Please do check exactly how the Interest charge is computed with the
providers – there will be differences). - The wider spread and higher price on the Financial Spreadbet reflects that it is
a quarterly contract and takes account of Interest and Dividends. - The profit is calculated by valuing the positions at the prevailing potential
closing price of the position i.e. the Bid Price – Opening Offer price x Size of
Exposure. - Interest will accrue on the CFD Daily until the position is closed.
- No interest would have accrued had the position not been held overnight.
Example 2 – Index Trading
We wish to take a Short position on the Dow Jones Index in anticipation of a fall in price:
| Financial Spreadbet | Contract for Difference | |||
| Bid Price | 8534 | 8559 | ||
| Offer Price | 8544 | 8564 | ||
| Type of Contract | Quarterly | Open until Closed | ||
| Size of Exposure | £10 per point | £10 per point | ||
| Value of Contract | £85,340 | £85,559 | ||
| Margin Requirement at 5% | £4267 | £4279 | ||
| Price falls 75 points and the position is held overnight. | ||||
| Bid Price | 8459 | 8484 | ||
| Offer Price | 8469 | 8489 | ||
| Interest Received | None | £3.49 | ||
| Current Profit | 65 Points @ £10 | 70 Points @10 | ||
| Profit £’s | £650 | £703.49 | ||
Notes:
- The Notional Trading Requirement on the Financial Spreadbet is usually at a
fixed level e.g. 400 – you would multiply this number by your stake to
calculate your Margin Requirement e.g. 400 x £10 = £4000. - The interest rate on the CFD is calculated as follows:
Value of position = £10 Per point x 8486.5 (the latest Mid price) =
£84,865
Interest @ 1.5 % p.a. of the total position = £84865 x 1.5% = £1272.97
p.a.
£1272.97 divided by 365 = £3.487.
(Please do check exactly how the Interest charge is calculated – there will
be differences.) - The wider spread and higher price on the Financial Spreadbet reflects that it is
a quarterly contract and takes account of Interest and Dividends. - The profit is calculated by valuing the positions at the prevailing potential
closing price of the position i.e. the Offer Price – Opening Bid Price x Size of
Exposure. - Interest will accrue on the CFD Daily until the position is closed.
