Bid |
CFD Trade |
Traditional Share Trade |
| Price shown |
120p 121p |
120p 121p |
| Margin / Initial outlay Required |
(5%) £605 |
£12,100 |
| Commission charge |
£30.25 |
£121.00 (1%) |
| Stamp duty |
£0 |
£60.50 (0.5%) |
| PTM Levy |
£0 |
£1.00 (fixed) |
| Total cost of transaction |
£635.25 |
£12,282.50 |
|
|
| With a traditional Share Trade your initial outlay will be 100% of the price of 10,000 Vodafone shares at 121p (£12,100.00). However, because City Private Clients CFD's are a margined product you will only typically need 5% (3% for indices) of the price of 10,000 Vodafone CFD shares (£605.00) to open the same position. |
|
Your bullish prediction proves to be correct and the Vodafone price rises to 128p/129p. Having held the position for one night, you decide to close your position by entering an equal but opposite trade, by selling 10,000 Vodafone CFD's at 128p. |
| PTM Levy payable on trades over £10000 |
Bid |
CFD Trade |
Traditional Share Trade |
| Sell Price |
128p |
128p |
| Gross profit / loss (7px10,000) |
£700 profit |
£700 profit |
| Total commission charged |
£32.00 |
£128.00 ** |
| Stamp duty |
£0 |
£0 |
| Financing cost |
£1.90 |
£0 |
| PTM Levy |
£0 |
£1.00 |
| Net profit / loss |
£635.85 |
£388.50 |
|
|
|
** Based on a commission charge of 1% to buy and sell |
| By closing your position, you realise a gross profit of £700. Your net profit, subtracting commission of £62.25 and the one night finance charge of £1.90 is £635.85 with City Private Clients. Alternatively, with your traditional share trade, you make a net profit of £388.50 having paid commission of £249 on the purchase and sale of your physical shares and a 0.5% charge for stamp duty. |
Imagine Vodafone shares are quoted at 120/121.