The strategy: Tom formed the view that the US stock market was going to experience a correction. He decided to use an ASX CFD to take a short position against the NASDAQ and benefit from his view.
How he did it: Tom sold 100 NASDAQ CFDs at US$2,467 each*, holding this position for three days.
The result: Tom’s view proved to be right. After three days, he closed his short position by buying 100 NASDAQ CFDs at US$2,395 per contract. After taking interest, brokerage and GST into account, Tom realised a gain of US$7,007.58 — that’s a 265.89% profit on his initial investment.
* You will need to convert Australian dollars into the appropriate currency (in this case, USD) before trading ASX CFDs over foreign indices, currencies and commodities.
| Item |
Amount |
| Open Short Position |
| Sell Quantity |
100 |
| Price |
US$2,467 |
| Contract Value |
US$246,700 |
| Initial Margin1 (Outlay) |
(US$2,500) |
| Brokerage (including GST)2 |
(US$135.69) |
| Close Short Position |
| Buy Quantity |
100 |
| Price |
US$2,395 |
| Contract Value |
US$239,500 |
| Variation Margin/Profit (Loss) |
US$7,200 |
| Brokerage |
(US$131.73) |
| Open Interest Charge3 |
(US$30.00) |
| Contract Interest4 |
US$105.00 |
| Profit (Loss) |
US$7,007.58 |
| Return on Outlay |
265.89% |
Assumptions:
1 Initial Margin calculated at US$25 per contract. Assumed position is held over 3 days with Last Settlement Price of US$2,400 on each day. Initial Margin rate is US$25 x Sell Quantity.
2 Brokerage is 0.055%, x contract value, including GST.
3 Open Interest charge rate (1.50%) x number of days contract is held (3) / number of days in the year (360) x Last Settlement Price (US$ 2,400) x Number of Contracts (100) x Units per Contract (1).
4 Contract Interest is Federal Funds Rate (5.25%), x number of days contract is held (3) / number of days in the year (360) x Last Settlement Price (US$ 2,400) x Number of Contracts (100) x Units per Contract (1).
* This example is hypothetical and for illustrative purposes only. CommSec does not specifically recommend the security used in this example and does not warrant that it will be available for ASX CFDs. Past performance is not indicative of future performance. ASX CFDs are speculative products that are highly leveraged and carry significantly greater risk than ungeared investments such as share trading; see the risk disclosure statement in the ASX CFD Client Agreement Form) for details.
The information on this site has been prepared without taking account of the objectives, financial situation or needs of any particular individual. For this reason, any individual should, before acting on the information on this site, consider the appropriateness of the information, having regards to the individual’s objectives, financial situation and needs, and, if necessary, seek appropriate professional advice.
The presence of a managed fund on this list should not be construed as a recommendation. No representation is given, warranty made or responsibility taken as to the appropriateness or performance of any of these funds.
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