{"id":70269,"date":"2023-10-02T17:00:00","date_gmt":"2023-10-02T14:00:00","guid":{"rendered":"https:\/\/ironfx-com-php8.wp-dev.int.theitops.net\/?p=70269"},"modified":"2025-12-02T15:10:59","modified_gmt":"2025-12-02T13:10:59","slug":"what-are-examples-of-cfds","status":"publish","type":"post","link":"https:\/\/www.smartchinaeducation.com\/ph\/what-are-examples-of-cfds\/","title":{"rendered":"What are examples of CFDs?"},"content":{"rendered":"

Trading with CFDs<\/a> can be very exciting and can potentially help you generate significant profits. But before you jump into it, you should select a reliable broker with a good track record and great resources you can depend on.<\/p>\n\n\n\n

Many beginners find CFDs interesting, but the information online can overwhelm them. This often makes it hard to understand how these derivatives work. Trading may seem simple in theory, but the reality is different. It becomes even harder when your own money is at risk. The examples below will show you several scenarios you may face when trading CFDs.<\/p>\n\n\n\n

CFD trading examples<\/strong><\/h2>\n\n\n\n

CFDs let you trade many different assets and instruments. You can trade CFDs on metals and choose gold, or trade CFDs on forex and pick any currency pair your broker offers.<\/p>\n\n\n\n

Now let\u2019s look at how this works in practice. Imagine you want to buy shares priced at \u00a35.00 each. You could purchase 15,000 shares for \u00a375,000 plus commissions. You could also choose a Contract for Difference (CFD).<\/p>\n\n\n\n

If the stock is well-established and highly liquid, your broker may offer a 15% margin. With that margin, you can gain exposure to the same 15,000 shares with only \u00a311,250 up front.<\/p>\n\n\n\n

If the share price rises by 15p, you can close the CFD position. In that case, you could make around \u00a32,250 (15p \u00d7 15,000), minus broker fees or other costs.<\/p>\n\n\n\n

\"various<\/figure>\n\n\n\n

Share CFD example<\/strong><\/h2>\n\n\n\n

Let\u2019s look at another example. Suppose Amazon shares trade at 2100\u20132101p, and your CFD broker<\/a> offers the same pricing. If you expect the price to rise, you can buy a CFD for 10,000 shares at 2101p. The full contract value is \u00a3210,100, but you only need a 10% margin, which is \u00a321,010.<\/p>\n\n\n\n

If the shares move up to 2140\u20132141p, you can close your position by selling 10,000 Amazon CFDs at 2140p. Your gain would be 39p per share (2140p \u2212 2101p). That totals \u00a33,900, minus commissions.<\/p>\n\n\n\n

Let\u2019s try another example with BP.<\/strong><\/h3>\n\n\n\n

Here\u2019s another example. Imagine BP trades at 520p\u2013521p. You make \u00a320 (2,000 \u00d7 1p) for every penny the price rises, and you lose the same amount for every penny it falls. If you expect the price to go up, you can buy 2,000 contracts at 521p.<\/p>\n\n\n\n

If the price climbs to 571p\u2013572p, you can sell at 571p. Your profit would be (571p \u2212 521p) \u00d7 2,000 = \u00a31,000.
If the price drops to 471p\u2013472p, you would sell at 471p instead. In that case, your loss would be (471p \u2212 521p) \u00d7 2,000 = \u00a31,000.<\/p>\n\n\n\n

Index CFD example<\/strong><\/h2>\n\n\n\n