Calculating Profit and Loss

Example 1:

Imagine the current quote for the gold is Gold: 881.85 / 882.60 meaning a trader can buy a gold CFD for 882.60 or sell a gold CFD for 881.85. 

Suppose a trader decides the value of gold to rise. Therefore, the trader places the order to buy 100 gold CFDs and pays $88,260 (100 x 882.60) for that order. Remember, at a leverage rate of 200:1, the traders deposit would be approximately $441 for this trade.

As expected, rises to 883.20 / 883.95. Now, to realize the profits, the trader places an order to sell 100 gold CFDs at the current rate of 883.20.

The trader bought 100 gold CFDs at 882.60 paying $88,260. Then the trader sold 100 gold CFDs at $88,320. That is a difference of 60 ticks or $60 ($88,260 – 88,320 = $60).

Total profit = US $60 on a deposit of $441  

Example 2:

Now in this example, imagine the trader once again buys 100 gold CFDs when trading at 881.85 / 882.60 and pays $88,260 (100 x 882.60) for that order.

However, the price of gold drops to 881.70 / 882.45. Now, to minimize loses, the trader sells 100 CFDs at 881.70 and receives $88,170.

In this case, the trader bought 100 gold CFDs paying $88,260 and sold 100 gold CFDs receiving $88,170. That is a difference of 90 ticks or $90 ($88,260 - 88,170 = $90).

Total loss = US $90