Risk Warning: FX & CFD trading involve a high level of risks, including capital invested
Error:
Subscribe to our daily newsletter and get the best forex trading information and markets status updates
Orbex is proud to offer a wide range of the most traded US & EU Stock CFDs, with a leverage of up to 1:5 and zero commissions*.
Stock trading involves the buying and selling of shares in a particular asset or company. A stock trader will purchase shares, own them, then sell them, depending on the market value of the stock.
Stock CFDs, on the other hand, allow you to trade the price movements of a particular asset or company, without the purchase of the physical shares themselves. With stock CFDs on MetaTrader4, traders can open a long (buy) position if the belief is that the value of the stock will go up, or a short (sell) position, if the belief is that the value of a stock will go down.
Margin % Example: AO Stock indicates that 35% of the instrument’s price is required to open 1 lot. For example: If AO today’s price is 56.80, then to open 1 lot of AO, you need 19.88 GBP.
Commission: The charge is 0.2% for each 1 lot you are trading, applicable only on UK and EU stocks. For example: If AO today’s price is 56.80 USD, then you multiply 56.80 * 0.002 = 0.11 GBP.
*Stock CFDs are subject to Corporate actions and Swaps.
How to Calculate your Profit or Loss
The formula for working out your profit or loss for any CFD share is as follows:
Long: (Buying) profit or loss = (exit price – entry price) * lots traded
Short: (Selling) profit or loss = (entry price – exit price) * lots traded
Example A:
You decide to buy 100 AAPL CFDs at $45 ,
The share price rises to $50 based on the company’s quarterly earnings.
You sell 100 AAPL CFDs at $50
Using the formula above for a long trade:
Profit or loss = (exit price – entry price) * lots traded
The result would be +$500
Example B:
You decide to sell 5 Amazon CFDs at $1,900 as you are expecting the price to fall.
However, the price goes up based on increasing company sales.
Therefore, you decide to close your position at the price of $1,919.
Using the formula above for a short trade:
Profit or loss = (entry price – exit price ) * lots traded
The result would be -$95.
Corporate Actions Formula
The basic formula used is d = p x n
d = dividend
p = position
n = dividend declared/number of index points (dividend amount)
Here’s the calculation we use for the dividend for equities:
A client opens a long (buy) position on 10,000 CFD shares of Apple (AAPL.OQ), with a net dividend declared at 2p.
The calculation is:
d = 10,000 x 0.02 = $200 (credited).
Another example we can look at is that a client opens a short (sell) position on 5,000 CFD shares of Deutsche Bank (DBKGn.DE), with a net dividend declared at 5p.
The calculation is: d = 5,000 x 0.05 = €250 (debited).
Commission on Stock CFDs*:
Orbex is running ‘0 Commissions Promotion’ across all stock CFDs. This promotion is valid on Starter Accounts for a limited time only.
The commission applicable on shares is 0.0016 based on the notional value of the number of shares traded as following.
(Lots * shares price * commission percentage)
Example:
For example, let’s say a client opens a long (buy) position with 10 CFD shares of Apple (AAPL.OQ).
The market price at the time is 160 USD, and the commission is 0.0016 Therefore, the commission calculation is:
10 shares * $160 * 0.0016 =$2.5
For more information on trading Stock CFDs, feel free to contact your account managers. For any other inquiries, please email support@orbex.com. To start trading Stock CFDs:
Investor Alert: Forex Trading & Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose.
