Trading CfD, you only have to put in your account the initial deposit required by the commodity. For example, Vodafone stock, if the margin requirement is 5%, you only need to put in the percentage of the transaction value. Buy value ￡50,000 Vodafone…
Trading CfD, you only have to put in your account the initial deposit required by the commodity. For example, Vodafone stock, if the margin requirement is 5%, you only need to put in the percentage of the transaction value. Buy value ￡50,000 Vodafone stock, only need to put ￡2,500 in the account (￡50,000 5%). Unlike traditional stock trading, you are not holding a company's stock when dealing with CfD. Profit or loss is determined by the difference between the opening price of an ECN commodity and the price of the peace. You do not have any voting rights when the shareholder Committee resolution. If you hold a short position, you need to pay dividends. If you hold a long position, you will receive a dividend. Because CfD is a financial derivative, it is not bound by any exchange. This means that the price of CFDs we offer is generally based on the prices derived from the various basic markets. At the same time, the price you see is the price you get.
A trading CfD has many advantages, and it generally does not have to pay stamp duty on the stock because you actually did not buy any stock. All renewal contracts will generate overnight interest. If you hold a bullish (for example, the market is going up, you will benefit), because you put a portion of the actual value of the traded goods, in the balance of the account, equivalent to the "effective lending." In this respect, we will be charged with the corresponding currency of the overnight borrowing and lending rates on the basis of a 2% proportion of the financing costs as the overnight interest. If you hold a short (for example, the market falls, you will be profitable, as you have deposited the full value of the goods, so you will be able to obtain a 2% percentage of the financing charge on the basis of the overnight borrowing and lending rate of the corresponding currency as the overnight interest (minimum to 0%), as opposed to other dealers, EMR FX offers very competitive overnight interest. As mentioned before, the profit or loss of any CFD transaction is based on the difference between the open price and the peace position.
Therefore, if you buy Vodafone at the price ￡1.40 and ￡50,000 at ￡1.60, you will earn a 20 penny difference, the actual amount is ￡7,143 (￡50,000/1.40x20p). If the price falls to ￡1.20, you will lose the same amount. To calculate the number of CFD contracts you would like to trade, you need to divide the price of the CFD in the amount you want to trade. For example, ￡50,000/￡1.40=35,714. Please confirm that you have read our risk warnings and understand the risks that margin transactions may pose to you. If the price continues to fluctuate with your transaction, it may result in a loss exceeding your initial investment amount.