Forex examples
Trade all our forex contracts commission-free. You can open a new position with a deposit of just 0.5% of the contract value.
The only charge is our dealing spread: for most major pairs this starts from 1 or 2 pips for a full or mini contract. See contract sizes in our contract details.
'Sell'
'Selling' EUR/USD
Opening the position
You decide to go short on EUR/USD. Our quote is 1.44700-1.44708 and you 'sell' two contracts (the equivalent of €200,000) at 1.44700.
The value of your position is €200,000 x 1.4470 = $289,400. To open the position you supply a deposit of just 0.5% of the notional amount.
Your deposit is therefore 0.5% x $289,400 = $1447. Please be aware, however, that CFDs are a leveraged product and that it is possible to lose more than your initial deposit.
Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that expresses, in pips, the difference between the interest paid to borrow the currency that is being notionally 'sold' overnight, and the interest received from holding the currency that is being notionally 'bought' overnight.
For standard full contracts, an administrative charge of no more than 0.3% per annum applies on either side of the current tom-next spread. For mini contracts, this charge is no more than 0.8%.
Closing the position
Nearly two weeks later, EUR/USD has fallen to 1.39762-1.39770, and you take your profit by 'buying' two contracts at 1.39770. Your profit on the trade is calculated as follows:
| Profit on trade | |
|---|---|
| Opening level | 1.44700 |
| Closing level | 1.39770 |
| Difference | 0.0493 |
| Profit on trade: 0.0493 x 2 contracts x $1 per pip x 100,000 = $9,860 | |
To calculate the overall profit and loss, you also have to include the accumulated daily interest rate adjustments.
'Buy'
'Buying' EUR/USD
Opening the position
You decide to go long on EUR/USD. Our quote is 1.44702-1.44710, and you 'buy' two contracts (the equivalent of €200,000) at 1.44710.
The value of your position is €200,000 x 1.44710 = $289,420. To open the position you supply a deposit of just 0.5% of the notional amount.
Your deposit is therefore 0.5% x $289,420 = $1447.10. Please be aware, however, that CFDs are a leveraged product and that it is possible to lose more than your initial deposit.
Interest adjustments
While the position remains open, your account is debited or credited to the current tom-next rate. Tom-next is a market swap rate that expresses, in pips, the difference between the interest paid to borrow the currency that is being notionally 'sold' overnight, and the interest received from holding the currency that is being notionally 'bought' overnight.
For standard full contracts, an administrative charge of no more than 0.3% per annum applies on either side of the current tom-next spread. For mini contracts, this charge is no more than 0.8%.
Closing the position
Against your expectations, EUR/USD later falls to 1.39760-1.39768, and you decide to cut your losses by 'selling' two contracts at 1.39760. Your loss on the trade is calculated as follows:
| Loss on trade | ||
|---|---|---|
| Opening level | 1.44710 | |
| Closing level | 1.39760 | |
| Difference | 0.495 | |
| Loss on trade: 0.0495 x 2 contracts x $1 per pip x 100,000 = $9900 | ||
To calculate the overall profit and loss, you also have to include the accumulated daily interest rate adjustments.
CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.