CFD Trade Examples
Example 1 – Forex CFD (EUR/USD)
The client expects the Euro to appreciate against the USD and therefore decides to buy 1 standard contract of EUR/USD (100,000 units) with an initial Margin requirement of $1,000.
Bacera's Dealing Desk quotes a bid/ask price of 1.3181/1.3184. The client buys Euros at 1.3184 USD.
The next day Euro has actually risen to 1.3250 USD and the client decides to take profit.
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 1.3250/1.3253. The client sells at 1.3250.
Your profit and loss is usually calculated in the secondary, or "quote" currency. Therefore the above EUR/USD trade's profit/loss is calculated in USD.
The profit/loss for trades denominated in USD is calculated using the following:
(Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results is a profit of (1.3250 – 1.3814) x 100,000 = 660 USD.
You may only be charged a financing cost if you hold your position overnight. Due to the simplicity of the example and the short time horizon of the trade, we have disregarded the interest rate swap that would marginally alter the profit calculation. For more information on Rollover, please review the CFD Swaps Explained section.
Example 2 – Precious Metal CFD (GOLD)
The client expects Gold to appreciate against the USD and therefore decides to buy 1 standard contract of Gold (100 troy oz) with an initial Margin requirement of $2,000.
Bacera's Dealing Desk quotes a bid/ask price of 1185.5/1182. The client buys Gold at 1182 USD.
The next day the Gold Price has actually risen to 1200 USD and the client decides to take profit.
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 1200/1200.5. The client sells at 1200.
The profit/loss for trades denominated in USD is calculated using the following: (Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results in a profit of (1200 - 1182) x 100 troy oz. = 1800 USD
You may only be charged a financing cost if you hold your position overnight. Due to the simplicity of the example and the short time horizon of the trade, we have disregarded the interest rate swap that would marginally alter the profit calculation. For more information on Rollover, please review the CFD Swaps Explained section.
Example 3 – Commodity CFD (US Crude Oil)
The client expects US Crude Oil to appreciate against the USD and therefore decides to buy 1 standard contract (1,000 barrels) with an initial Margin requirement of $1,000.
Bacera's Dealing Desk quotes a bid/ask price of 81.37/81.44. The client buys US Crude Oil at 81.44 USD.
The next day US Crude Oil has actually risen to 81.78 USD and the client decides to take profit.
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 81.78/81.85. The client sells at 81.78.
The profit/loss for trades denominated in USD is calculated using the following: (Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results in a profit of (81.78 – 81.44) x 1,000 barrels = 340 USD
You may only be charged a financing cost if you hold your position overnight. Due to the simplicity of the example and the short time horizon of the trade, we have disregarded the interest rate swap that would marginally alter the profit calculation. For more information on Rollover, please review the CFD Swaps Explained section.
The client expects the Euro to appreciate against the USD and therefore decides to buy 1 standard contract of EUR/USD (100,000 units) with an initial Margin requirement of $1,000.
Bacera's Dealing Desk quotes a bid/ask price of 1.3181/1.3184. The client buys Euros at 1.3184 USD.
| Quote(bid/ask) | 1.3181/1.3184 |
| Buy Price | 1.3184 |
| Volume | 1 Lot(100,000 units) |
| Initial outlay (Bacera Margin Requirement) | $1,000 USD |
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 1.3250/1.3253. The client sells at 1.3250.
Your profit and loss is usually calculated in the secondary, or "quote" currency. Therefore the above EUR/USD trade's profit/loss is calculated in USD.
The profit/loss for trades denominated in USD is calculated using the following:
(Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results is a profit of (1.3250 – 1.3814) x 100,000 = 660 USD.
| Quote(bid/ask) | 1.3250 /1.3253 |
| Sell Price | 1.3250 |
| Volume | 1 Lot (100,000 units) |
| (Liquidation price - Opening price) x Trade Size | (1.3250 – 1.3814) x 100,000 = $ 660 USD |
Example 2 – Precious Metal CFD (GOLD)
The client expects Gold to appreciate against the USD and therefore decides to buy 1 standard contract of Gold (100 troy oz) with an initial Margin requirement of $2,000.
Bacera's Dealing Desk quotes a bid/ask price of 1185.5/1182. The client buys Gold at 1182 USD.
| Quote(bid/ask) | 1185.5/1182.0 |
| Buy Price | 1182 |
| Volume | 1 Lot(100 troy oz) |
| Initial outlay (Bacera Margin Requirement) | $2,000 USD |
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 1200/1200.5. The client sells at 1200.
The profit/loss for trades denominated in USD is calculated using the following: (Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results in a profit of (1200 - 1182) x 100 troy oz. = 1800 USD
| Quote(bid/ask) | 1200/1200.5 |
| Sell Price | 1200 |
| Volume | 1 Lot (100 troy oz) |
| (Liquidation price - Opening price) x Trade Size | (1200 - 1182) x 100 troy oz. = 1800 USD |
Example 3 – Commodity CFD (US Crude Oil)
The client expects US Crude Oil to appreciate against the USD and therefore decides to buy 1 standard contract (1,000 barrels) with an initial Margin requirement of $1,000.
Bacera's Dealing Desk quotes a bid/ask price of 81.37/81.44. The client buys US Crude Oil at 81.44 USD.
| Quote(bid/ask) | 81.37/81.44 |
| Buy Price | 81.44 |
| Volume | 1 Lot (1,000 barrels) |
| Initial outlay (Bacera Margin Requirement) | $1,000 USD |
At the time the client wants to close the position, Bacera's Dealing Desk quotes the client a bid/ask price of 81.78/81.85. The client sells at 81.78.
The profit/loss for trades denominated in USD is calculated using the following: (Liquidation price - Opening price) x Trade Size = Profit/Loss in USD.
This results in a profit of (81.78 – 81.44) x 1,000 barrels = 340 USD
| Quote(bid/ask) | 81.78/81.85 |
| Sell Price | 81.78 |
| Volume | 1 Lot (1,000 barrels) |
| (Liquidation price - Opening price) x Trade Size | (81.78 – 81.44) x 1,000 barrels = 340 USD |
CFD Calculator
Profit/loss Calculation:
| Step 1 | Short/Long | |
| Step 2 | Choose CFD | |
| Step 3 | Current Price | $ 0.00 |
| Step 4 | Contract Size | $ |
| Step 5 | Closing Price | $ |
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Profit/Loss
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*DISCLAIMER: Provided current prices and pip values may be different than actual current prices and pip values, the profit/loss calculation is only for reference.
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Bacera Co Pty Ltd.