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. |
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