CFD ETF Trading Example

  • With CFD trading you buy a CFD based on a certain amount of the underlying asset. In this case, we will examine how to trade ETF.
  • The following worked examples show how you can use CFDs to trade a number of different markets.
  • These examples show trades that result in both profits and losses.
  • CFD trading example (ETF) - Buying SPDR (SPY).
  • You believe that the shares of SPY will rise, so you decide to buy a CFD based on 2000 shares.
  • Tradeview Forex quotes you a spread of $84.68/$84.70 for SPDR (SPY).
OPENNING TRADE  
Price of SPY is $84.70 84.70
Number of underlying shares 2,000
Value of total position (US$) 169,400
Transaction Fee @ $.24 per share 480
Margin requirement @ 20% ($) 33,880

After 2 days the market has risen and you decide to close your position.

CLOSING TRADE (2 days later)  
Price of SPY is $86.75 86.75
Number of underlying shares 2,000
Value of total position ($) 173,500

PROFIT (loss) ON TRADE  
Closing value ($) 173,500
Opening value ($) 169,400
Gain on position ($) 4,100
Total transaction Fee $ (480)
Overall profit on trade ($) 3,620


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