Whether you’re interested in multi national or small cap company performance you can trade thousands of share CFDs across exchanges such as the ASX, LSE, NASDAQ and HKSE - from a single City Index trading account.
Go long or short with the potential to be paid financing and dividends, with lower trading costs than physical shares, at a fraction of the price.
Let's say BHP is currently trading at $38.00, with an underlying market spread of $37.99 bid/$38.01 ask (sell price/buy price).
You think BHP are set to announce some strong trading figures and decide to buy (go long) 500 CFDs at $38.01 (buy price).
You were right: Over the coming days, BHP's share prices rally after a stronger-than-expected trading performance, with share prices reaching $42.00. The underlying market spread is now $41.99 bid/$42.01 offer (sell price/buy price). You decide to cash in your profits and sell 500 CFDs at $41.99 (our sell price).
Result: The opening (notional) value of the CFD trade is $19,005 (500 CFDs x $38.01). The closing (notional) value of the CFD trade is $20,995 (500 CFDs x $41.99). This nets you a $1,990 gain ($20,995 - $19,005).
Alternative scenario: If however, you were wrong and BHP shares had dropped to $33.99, this would have netted you a $2,010 loss (($38.01 – $33.99) x 500 CFDs).
You think BHP shares are overvalued and decide to sell (go short) 500 CFDs at 37.99 (sell price).
You were right: Over the coming days, BHP's share prices fall as other investors sell their shares, causing prices to fall to $34.00. The underlying market spread is now $33.99 bid/$34.01 offer (sell price/buy price). You decide to cash in your profits and buy back 500 CFDs at $34.01.
Result: The opening (notional) value of the CFD trade is $18,995 (500 CFDs x $37.99). The closing (notional) value of the CFD trade is $17,005 (500 CFDs x $34.01). This nets you a $1,990 gain ($18,995 - $17,005).
Alternative scenario: If however, you were wrong and BHP shares had rallied to $42.01, you would have netted a $2,010 loss ((42.01 – 37.99) x 500 CFDs).For the purpose of simplicity, commissions, financing charges and payments have been omitted from these examples. Find out more about our financing charges.
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The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. City Index recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. City Index Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.