As with traditional share dealing, CFD prices are quoted as a Bid (the price you can sell at) and an Offer (the price you can buy at). With CFD trading you buy a CFD based on a certain amount of the underlying asset.
Equities Trading Examples
The following worked equities trading examples show how you can use CFDs to trade a number of different markets.
These equities trading examples show trades that result in both profits and losses.
CFD trading example (Equities trading example) on Atlantic FX Pro – Buying Yahoo (YHOO)
You believe that the shares of Yahoo will rise, so you decide to buy a CFD based on 3000 shares.
Atlantic FX quotes you a spread of $13.47/$13.49 for Yahoo (YHOO).
Equities trading examples:
| OPENNING TRADE | |
| Price of YHOO is $13.49 | 13.49 |
| Number of underlying shares | 3,000 |
| Value of total position ($) | 40,470 |
| Transaction Fee @ $.10 per share | 300 |
| Margin requirement @ 20% ($) | 8,094 |
After 2 days the market has risen and you decide to close your position.
| CLOSING TRADE (2 days later) | |
| Price of Yahoo is $14.01 | 14.01 |
| Number of underlying shares | 3,000 |
| Value of total position ($) | 42,030 |
| PROFIT (loss) ON TRADE | |
| Closing value ($) | 42,030 |
| Opening value ($) | 40,470 |
| Gain on position ($) | 1,560 |
| Total transaction fee ($) | (300) |
| Overall profit on trade ($) | 1,260 |
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