With CFDs, you don’t actually buy the asset you’re trading in, yet you can still gain if the market moves in your favour. You also need to be aware that you can also lose if the market moves against you.

Add to my collection
CFD Trading Examples

CFD trading example: Company ABC share CFDs

  • Company ABC’s shares are trading at 325.9/326p (bid/offer) in the market.
  • You think Company ABC’s shares will rise over the coming weeks and you buy (go long) 10,000 CFDs of Company ABC based on a buy price of 326p.
  • Commission cost to open charged at a rate of 0.15% - £48.90
Opening value: £32600 (10,000 x 326p)

Winning trade

If Company ABC’s shares rise the following week and you decide to cash in on your profit by closing your CFD trade the current bid/offer price for Company ABCs share CFD 330.9p/331p

Event Outcome
Therefore the sell price is: 330.9p
Market movement: +4.9p
Sell 10,000 CFDs at 330.9p £33090 (10,000 x 330.9p)
Profit £490 (£33090-£32600)
Less commission £49.64 (£33090 x 0.15%)
Net Profit £391.46

No Stamp Duty to pay on the buy as you are speculating and not owning the underlying asset therefore saving £163.00 in additional costs.

Losing trade

Let’s now look at would have happened if you were incorrect and the prices moved against you.

If Company ABC’s shares fell from the opening buy price of 326p to 321p, this would be a movement of 5p against the direction that you had predicted.

Event Outcome
Therefore the sell price is: 321p
Market movement: -5p
Sell 10,000 CFDs at 321p 32100 (10,000 x 321p)
Loss £500
Commission payable £48.15
Total Loss £597.05

If you want to put our infographic on your own website, here's the code to copy and paste into your page:

<a href="https://www.barclaystradinghub.co.uk/home/cfds/trading-examples.html"><img src="https://www.barclaystradinghub.co.uk/content/dam/bwpublic/global/images/aspect-ratio-1-0/BTH%20images/CFD_Trading_Infographic_Final.jpg" alt="CFd Trading Examples" width="640" border="0"/></a><br />Source: <a href="https://wealth.barclays.com">Barclays Wealth and Investment Management</a>