Example

1. ABC Corp. is trading at 1,599/1,600 and you think the price is going to rise in value.
2. You decide to go long so you buy ABC Corp. at 1,600p
3. You decide to trade 1,000 shares. You buy 1000 CFDs at 1,600p giving you a position size of £16,000. (1,000 x 1,600p = £16,000)
4. Equity CFDs attract a commission charge of 8 basis points. One basis point is 0.01 of a percentage point. To determine how much commission you would pay, you multiply your position size by the commission charge. In this example the charge is £12.80. (£16,000 x 0.08%=£12.80)
5. You now hold a position of 1,000 CFDs with a value of £16,000
6. Your margin requirement with Capital Spreads for ABC Corp. is 5% therefore £800 will be allocated from your account against this trade as initial margin. Remember if the share price moves against you, it is possible to lose more than this £800 initial margin.
7. Two days later you see that ABC Corp has risen to 1,625/1,626
8. Therefore you choose to sell at 1,625p and realise your profit. The commission charge of 8 basis points will also apply to the closure of the trade, equalling £13.00
9. You bought at 1,600p and sold at 1,625p which means ABC Corp. rose by 25 pence. 25pence x 1000 CFDs = £250 revenue.
10. You held the position for two days which means you incurred two nights financing charge. This equals £16,000 (value of the position) x Libor* + 3%** (which in this instance = 8%) /365 (number of days in the year) x 2 (number of days position is held) = £7.01

11. Therefore you deduct the financing and commission charges from the total revenue and realise a profit of £217.19.

    This means that from your initial outlay of £800 you have earned a profit of £217.19. If the market had moved against you by the same amount, you would have incurred a loss of (£250 + commission & financing) £282.81