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November 27, 2017

Question:How to calculate profit/loss of CFD tradings?

Answer:

Let’s see a scenario where you bought £5 rather than sold, if the DAX subsequently moves up to a level of 9613.5/9614.5 and you decide that this would be a good point for me to exit the trade, you would work out the profit on your trade as follows; the amount you bought x the number of points that the trade has moved in your favour.

In this case your profit would therefore be 5 x 2, meaning that you would make a profit of £10 on the trade.

Alternatively, had you sold £5 of the DAX at the 9610.5 level and then closed the trade at that 9613.5/9614.5 level, your loss would be 5 x 4, seeing as the price of your closing trade would be four points higher than when you opened it. In this case, your loss on the trade would be £20.

If however, the DAX fell from 9610.5/9611.5 to 9608.5/9609.5 – had you bought £5 of the DAX at the original level your loss would be calculated as follows; the amount you bought x the number of points that the trade has moved against you.

In this instance your loss would be 5 x 3, meaning that you would make a loss of £15. On the other hand, if you had sold £5 of the DAX at the original level then you profit would be 5 x 1, giving you a profit of £5.

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