CFD vs Stock Trading

Comparison of CFDs against Traditional Stock Trading

Illustration 1: Investor has a long position in XYZ stock and CFD price was up when the position was closed off.

 
CGS-CIMB Securities CFD
Online Trading
Traditional Stock
Online Trading
Quantity of CFDs/Stocks 1,000 1,000
XYZ Buy Price $10.00 $10.00
Contract Value $10,000.00 $10,000.00
Initial Outlay ($1,000.00) ($10,000.00)
Commission (to buy) ($25.00) ($27.50)
Other Fees (e.g. Clearing Fees) - ($4.75)
GST 7% ($1.75) ($2.26)
Initial Outlay (including cost) ($1,026.75) ($10,034.51)
XYZ Sell Price $11.00 $11.00
Contract Value $11,000.00 $11,000.00
Gross Profit/Loss $1,000.00 $1,000.00
Commission (to sell) ($27.50) ($30.25)
Financing Cost* ($5.48) -
Other Fees (e.g. Clearing Fees) - ($5.23)
GST 7% ($1.93) ($2.48)
Net Profit $938.34 $927.53
Return on Outlay 91.39% 9.24%

Illustration 2: Investor has a long position in XYZ stock and CFD price was down when position is closed.

 
CGS-CIMB Securities CFD
Online Trading
TraditionalStock
Online Trading
Quantity of CFDs/Stocks 1,000 1,000
XYZ Buy Price $10.00 $10.00
Contract Value $10,000.00 $10,000.00
Initial Outlay ($1,000.00) ($10,000.00)
Commission (to buy) ($25.00) ($27.50)
Other Fees (e.g. Clearing Fees) - ($4.75)
GST 7% ($1.75) ($2.26)
Initial Outlay (including cost) ($1,026.75) ($10,034.51)
XYZ Sell Price $9.00 $9.00
Contract Value $9,000.00 $9,000.00
Gross Profit/Loss ($1,000.00) ($1,000.00)
Commission (to sell) ($25.00) ($25.00)
Financing Cost* ($5.48) -
Other Fees (e.g. Clearing Fees) - ($4.28)
GST 7% ($1.75) ($2.04)
Net Loss ($1,058.98) ($1,065.83)
Return on Outlay (103.14%) (10.62%)
Note: The above illustration assumes the trade takes place on a Friday and the subsequent sale takes place on the following Wednesday. Position is held for 5 days. Financing cost* is determined at the CGS-CIMB Securities Base Rate (CBR) plus 3.75% for long positions, minus 3.75% for short positions.
This example uses a financing rate of 4% and assumes no change in valuation price on Monday & Tuesday. CBR is subject to change as it relates to the interbank quoted rate.