Let’s look at your trading account and imagine that you’ve just invested $500.
Since we offer leverage of up to 400 (where permitted by local regulations), you can now open trades of up to $200,000 (see below):
|Your investment||Leverage||Your trading power|
As you know, there are many commodities, currency pairs, cryptocurrencies indices, shares and ETFs that you can trade in the form of CFDs. Let’s take an example of a popular commodity: Gold.
Now let's say that one CFD on gold is currently trading at $1,000. Your intuition tells you that gold prices will move up, and therefore you’ve decided to buy 100 CFDs on Gold.
100 x 1,000 = $100,000
After a while, you look at your trading account and see that you were right: the price of the CFD on Gold has gone up and is now trading at $1,020 !
It means that your 100 CFDs are worth now:
100 x 1,020 = $102,000
You decide to close your trade.
Your total profit from this trade is:
102,000 – 100,000 = $2,000
A $2,000 profit for a $500 investment… Not bad right?
Note that the same logic of calculation applies to all the instruments.
*In this example, we did not include the potential rollover, overnight financing and spread in the calculations.