Example- Share Dealing

Microsoft

We wish to take a Long position in Microsoft in anticipation of a rise in price and wish to expose ourselves to 500 Shares:

	Contract for Difference
Bid Price	$25.50
Offer Price	$25.55
Type of Contract	Open until Closed
Size of Exposure	500 Shares
Value of Contract Margin Requirement at 10%	$25.555x 500 =$12,775 $1,277.50
Commission	$40 round trip trade (Buy or Sell or vice versa)
Closing Price	Price appreciates $1.95 and the position is closed. $27.50
Difference	$27.50-$25.55 = $1.95
Profit on Trade	$ 975 ($ 1.95 x 500) - Commission = $935

View the above example with Interest and Dividends adjustments

The interest expense of your position is calculated daily, by applying the applicable interest rate to the closing value of the position. In this example, the applicable interest rate is 3.00% p.a. based on the Federal Funds Effective Rate (FFER) rate of 3.00% plus a margin of 2.0%. Therefore, assuming Microsoft closed at $ 25.85 the interest expense for that day would be $ 12,925 x 7.00% / 360 = $ 1.80. (Please note FFER may vary). Suppose this trade was open for 10 days then $1.80 x 10 = $18.00.

Should Microsoft announce a dividend, the net amount of the dividend will be credited to the account the day the stock goes "Ex-Dividend". For example if the net dividend was 7 cents, 0.07 x 500 = $ 35 would be credited to the client's account.

	Contract for Difference
Bid Price	$25.50
Offer Price	$25.55
Size of Exposure	500 Shares
Value of Contract	$25.555x 500 =$12,775
Commission	$40 round trip trade (Buy or Sell or vice versa)
Margin requirement at 20% Closing Price end of the day Interest Charged	$1,277.50 $25.85 Price appreciates 30 cents & the position is held overnight. The interest charged per day $ 12,925 ($25.85 x 500) x 5.00 % /360 = $1.80
Dividend Adjustment Closing Price	0.07 x 500 = $35 $ 27.50
Difference	$27.50-$25.55 = $1.95
Total Net Profit on Trade Return on Investment	$ 975 ($ 1.95 x 500) - Commissions - 18.0* Interest Charge + Dividend Adjusment $ 35 = $ 952