CFD
WHAT ARE CFDs
CFD PRODUCTS OFFERED
CFD TRADE EXAMPLES
TRADING WITH BACERA
CFD Trade Examples
The following examples will help you understand how CFD trading works and how to calculate profits and losses. The following examples will also help you appreciate the effect of leverage on your CFD trading results, and see clearly the difference in costs between trading CFDs and traditional commodities.
Opening position:
Spot Gold is trading at (bid/ask) $900.00/$900.50. You want to buy 1 CFD (100 Oz.) of Gold at the ask price of $900.50 per Oz. (Initial Outlay is 100 x 900.50 = 90,050.00) with the belief that the price of Gold will rise.
Bacera |
Traditional Broker |
Buy Price $900.50 |
Buy Price $900.50 |
Margin $2,000.00 |
Initial Outlay $90,050.00 |
Commission charge
$0 |
Commission charge
$25 |
Total Outlay $2,000.00 |
Total Outlay $90,075.00 |
The Traditional Broker requires an initial outlay that is 100% of the price of 100 Oz. of Gold at $900.50 ($90,050.00). Because Bacera Clients trade with leverage, you will only need to outlay the margin requirement, $2,000.00.
Bacera does not charge commission on Gold CFD trades. Bacera is remunerated through the difference between the bid/ask spread. You will pay $0 commission per trade in this instance with Bacera compared with $25.00 per transaction with the Traditional Broker.
The total outlay of this transaction with Bacera is $2,000.00, which is $88,075.00 less than what a trader would have to pay with traditional Shares for the same exposure in the market.
Closing position
The price of Gold rises to $910.50. Having held the position overnight, you decide to close your position by entering an equal but opposite trade, by selling 1 CFD (100 Oz.) of Gold at $910.50.
Bacera |
Traditional Broker |
sell Price $910.50 |
sell Price $910.50 |
Gross profit/loss $1,000.00 |
Gross profit/loss $1,000.00 |
Total Commission charges $0 |
Total Commission charges $50 |
Overnight Rollover*: 1 day $-4.40 |
Overnight Rollover: 1 day 0 |
GST Zero |
GST $5 |
Net profit/loss $995.60 |
Net profit/loss $945.00 |
*Overnight Rollovers may vary due to market situations.
By closing your position you realize a gross profit of $1,000.00. The net profit received from Bacera and the Traditional Broker is calculated by subtracting commission charges and Goods and Services Tax (“GST”) from gross profit.
Your net profit received from Bacera is $995.60 as opposed to $945.00 by trading with a Traditional Broker, due to substantially higher commission/fees on your trade. Additionally, with physical shares you will be subject to GST on commissions. CFD commissions are not subject to GST.
Risk Warning:
Leverage is a double-edged sword. Utilizing leverage results in greater exposure to adverse market movements. Leverage can magnify your losses as well as your profits.
Profit/Loss Calculation
| Step 1 | Short/Long | |
| Step 2 | Choose CFD | |
| Step 3 | Current Price | $ 0.00 |
| Step 4 | Contract Size | $ |
| Step 5 | Closing Price | $ |
|
|
|
Profit/Loss
=
$
|
|
*DISCLAIMER: Provided current prices and pip values may be different than actual current prices and pip values, the profit/loss calculation is only for reference.
|
| RISK WARNING: |
