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Aussie 200 Index CFD trading example

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Going Long and making a profit using an Index CFD

In this example you open a Long position and close at a greater price. After financing charges you would have made $345.72 profit.However, if the price had moved in the opposite direction by an equal amount, your loss would have been $345.72.

Step 1 - Opening your Account	Calculation	Account Display

You open an account with CMC and have on deposit A$10,000 in Total Equity.	N/A	Total Equity	$10,000.00
You have no Margin Requirement at this point as you hold no CFD positions.	N/A	Total Margin Requirement	$0.00
Total Free Equity is your Total Equity Less your Total Margin Requirement	10000 � 0 = 10000	Total Free Equity	$10,000.00

Step 2 - Opening a position	Calculation	Account Display

The price of AUSSIE200 Index CFD is 5210 (bid price) / 5212 (offer price)		Total Equity	$10,000.00
The price of AUSSIE200 Index CFD is 5210 (bid price) / 5212 (offer price)
The price of AUSSIE200 Index CFD is 5210 (bid price) / 5212 (offer price)
Your Total Margin Requirement is the number of CFDs multiplied by the CMC Price, multiplied by the instrument Margin percentage. The AUSSIE200 has a 1% Margin Percentage. Your Total Margin Requirement to open this position is $521.20	10 x 5210 x 1% = 521.20	Total Margin Requirement	$521.20
You decide to hold the position overnight. The closing price for AUSSIE200 Index CFD for that day was 5210, the same as your purchase price		Total Free Equity	$9,478.80
Your Total Free Equity is your Total Equity Less your Total Margin Requirement	10000 � 521.20 = 9478.80	Total Free Equity	$9,478.80

Step 3 - Closing the position	Calculation	Account Display

Following a positive lead from the US overnight, the AUSSIE200 Index CFD opens the next day is 5248/50		Total Equity	$10,345.72
You decide to close your position and sell 10 AUSSIE200 Index CFDs at the bid price 5248
Your Total Equity would increase by $360	(5248 - 5212) x 10 = 360
You would pay $0 Commission for this trade. CMC charges no Commission for buying and selling Index CFDs.
Your Account is debited $14.28 for overnight financing. Overnight financing is calculated by the number of CFDs multiplied by the CMC price, multiplied by the Financing Rate and divided by 365.	(10 x 5212) x 10% / 365 =14.28
Your Total Margin Requirement would now be zero as your position has been closed		Total Margin Requirement	$0.00
Your Total Free Equity is your Total Equity Less your Total Margin Requirement	10345.72 � 0 = 10345.72	Total Free Equity	$10,345.72

* Based on independent research conducted by Investment Trends in May 2007, 53% of Australian CFD traders, trade with CMC Markets. † CMC Markets reserves the right to refuse the placement of guaranteed stop loss orders and other terms & conditions apply. The information on this page does not take into account your objectives, financial situation or needs. Consequently, you should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire the CFDs. A Product Disclosure Statement (PDS) is available by contacting CMC Markets on 1300 303 888 and at our website www.cmcmarkets.com.au. Information about our services, including our fees and charges is also contained in our Financial Services Guide, which is available at those sources. It is important for you to consider the PDS in deciding whether to acquire, or to continue to hold, the CFDs. CFDs can be risky and are not suitable for all investors. CMC Markets recommends that you should seek independent professional advice. CMC Markets is the trading name of CMC Markets Asia Pacific Pty Ltd (ACN 100 058 213), AFS Licence No. 238054, the CFDs issuer. Education services are provided by CMC Markets Pty Ltd (ACN 100 058 106, AFSL No. 279437), a subsidiary company of CMC Markets Asia Pacific Pty Ltd.