You decide to sell
the FTSE 100 CFD on the 1st of June 2005. A City Index trader
quotes you 4964/4968 and you sell 10 CFDs at 4964.
Opening Trade
Price of FTSE 100 CFD - 4964
Number of Values - 10
Value of CFDs - £49,640.00
Margin Requirement (7.5%) - £3,723.00
Daily Financing
On a nightly basis you receive financing for this position based
on Sterling LIBOR. Your financing rate might be LIBOR – 2.25%.
Assume this equates to a financing rate of (4.75%-2.25%) 2.50% and
the closing price for the day is 5011. You receive 10 x 5011 x
2.25% / 365 = £3.09 for holding the position overnight. This will
be credited to your account on the next trading day.
Closing Trade
7 days later the FTSE 100 CFD is quoted 5025.2/5029.2 and you
buy 10 CFDs at 5029.2.
Price of FTSE 100 CFD - 5029.2
Number of CFDs - 10
Value of CFDs - £50,292.0
Opening Value of CFDs - £49,640.00
Closing Value of CFDs - £50,292.00
Loss on Trade - (£652.00)
Financing (7 days) - £24.46
Overall Loss on Trade - (£625.54)