ETFs Examples
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Trading ETFs or ETCs with IG Markets enables you to gain exposure to markets that are difficult to access. The example below takes you through trading an ETF CFD.
Buying MSCI Brazil
You think Brazilian stocks are set to rise, so in order to take advantage of any market move you decide to trade an ETF, MSCI Brazil, listed on the LSE, that provides exposure to over 50 companies in Brazil
In the morning, our price for MSCI Brazil stands at 3722/3732, and you buy 1,000 shares at 3732, the offer price. As a Trader Account holder, instead of putting up the full value of the shares (£37.32 x 1,000), you only need to supply a deposit of 10% or £3732.*
After the release of positive manufacturing data in Brazil, our price for MSCI Brazil in the afternoon stands at 3785/3795 and you decide to take your profit.
Profit
| Opening level | 3732 |
| Closing level | 3795 |
| Difference | 0.63p |
Profit: 0.63p x 1,000 = £630
To calculate the overall result on the transaction you would also have to take into account the commission you have paid and the interest and dividend adjustments.
Of course, had the market moved in the opposite direction, you would have made a loss that may have exceeded your initial deposit.
*This example is based on the MSCI Brazil margin rate available to Trader Account holders.
Selling MSCI Brazil
You think Brazilian stocks are set to fall, so in order to take advantage of any market move you decide to trade an ETF, MSCI Brazil, listed on the LSE, that provides exposure to over 50 companies in Brazil
In the morning, our price for MSCI Brazil stands at 3722/3732, and you sell 1,000 shares at 3722, the bid price. As a Trader Account holder, instead of putting up the full value of the shares (£37.22 x 1,000), you only need to supply a deposit of 10% or £3722.*
After the release of positive manufacturing data in Brazil, our price for MSCI Brazil at midday stands at 3765/3775 and you decide to cut your losses and close your position.
Loss
| Opening level | 3722 |
| Closing level | 3775 |
| Difference | 0.53p |
Loss: 0.53p x 1,000 = £530
To calculate the overall result on the transaction you would also have to take into account the commission you have paid and the interest and dividend adjustments.
*This example is based on the MSCI Brazil margin rate available to Trader Account holders.
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