CFDs are traded on margin between a trader and a CFDs provider so as to exchange the cash difference between the opening price and closing price of a transaction. Usually less accessible to retail investors, CFDs products allow retail clients to trade shares, equity indices and futures. Without commission, trading fees, clearing fees or stamp duty, CFDs can be an alternative to trading on the forex market.
One Single Account
Traders can create an ideal multi-investment portfolio using a single trading account that enables them to trade multiple asset classes, making portfolio management and monitoring much easier.
Hedging with CFDs
Allowing you to short sell and to profit from falling market prices, CFDs can be used as a hedging tool against portfolio investments. For example, if you have a portfolio of US tech stocks which you wish to keep for long term, but feel that there is a short-term downside risk to it, you could mitigate a short-term loss by shorting the CFDs for NASDAQ.
Effective on 7 August 2017, Monday
| MT4 Code | P/L Currency | Trading Hours (GMT)* | Break Time (GMT) | Target Spread | Trade Size Minimum (lots) | Trade Size Maximum (lots) | Trade Size Step (lots) | Standard Contract Size | Minimum Value per Tick (CCY) |
|---|---|---|---|---|---|---|---|---|---|
| A50 | USD | 01:00 – 08:30, Monday – Friday | Daily from 08:30 – 01:00 | 12.5 | 0.1 | 10 | 0.1 | 10 | 1 USD |
| AUS200 | AUD | 23:50 – 21:00 (Fri 20:45), Sunday – Friday | Daily from 06:30 – 07:10, 21:00 – 23:50 | 2.3 | 0.1 | 10 | 0.05 | 20 | 2 AUD |
| DE30 | EUR | 06:00 – 20:00, Monday – Friday | Daily from 20:00 – 06:00 | 1.8 | 0.1 | 10 | 0.05 | 20 | 0.2 EUR |
| ES35 | EUR | 06:00 – 18:00, Monday – Friday | Daily from 18:00 – 06:00 | 10.3 | 0.1 | 10 | 0.1 | 10 | 1 EUR |
| F40 | EUR | 06:00 – 20:00, Monday – Friday | Daily from 20:00 – 06:00 | 3.2 | 0.1 | 10 | 0.1 | 10 | 1 EUR |
| HK50 | HKD | 01:15 – 08:15, Monday – Friday | Daily from 00:00 – 01:50, 04:00 – 05:00, 08:15 – 00:00 | 10 | 0.1 | 10 | 0.02 | 50 | 5 HKD |
| JP225 | JPY | 23:00 – 20:15, Sunday – Friday | Daily 20:15 – 23:00 | 13.5 | 0.1 | 10 | 0.01 | 500 | 50 JPY |
| STOXX50 | EUR | 06:00 – 20:00, Monday – Friday | Daily from 20:00 – 06:00 | 3.2 | 0.1 | 10 | 0.1 | 10 | 1 EUR |
| UK100 | GBP | 06:00 – 20:00, Monday – Friday | Daily from 20:00 – 06:00 | 2.7 | 0.1 | 10 | 0.1 | 10 | 1 GBP |
| US30 | USD | 22:00 – 22:00 (Fri 20:15), Sunday – Friday | Daily 20:15 – 20:30, 21:00 – 22:00 | 4.3 | 0.1 | 10 | 0.1 | 10 | 1 USD |
| US100 | USD | 22:00 – 22:00 (Fri 20:15), Sunday – Friday | Daily 20:15 – 20:30, 21:00 – 22:00 | 2.3 | 0.1 | 10 | 0.05 | 20 | 2 USD |
| US500 | USD | 22:00 – 22:00 (Fri 20:15), Sunday – Friday | Daily 20:15 – 20:30, 21:00 – 22:00 | 0.83 | 0.1 | 10 | 0.02 | 50 | 0.5 USD |
| USOil | USD | 22:00 – 20:45, Sunday – Friday | Daily 20:45 – 22:00 | 0.05 | 0.1 | 10 | 0.01 | 1000 | 1 USD |
| UKOil | USD | 00:00 – 21:00, Monday – Friday | Daily 21:00 – 24:00 | 0.05 | 0.1 | 10 | 0.01 | 1000 | 1 USD |
***Out of Market Hours Clause
Although the selected CFD symbols are open 24 hours a day, we are not obliged to quote prices or accept orders to which Out of Hours Trading applies whenever the relevant exchange is closed for business. You may refer to the table for the indicative spreads for the active trading session for reference.
Note: Except for stop loss orders and profit orders, open orders for all CFDs will be closed at the end of the day.
*Our Server Time is currently set to GMT+1 due to Europe Daylight Savings changes.
Leverage
Leverage allows traders to hold larger positions than their initial cash deposit. In other words, this means that their initial outlay is supplemented to increase the value of their underlying investments. The higher the leverage, the larger the position the trader can execute for the same amount of initial deposit.
For example, a client using 100:1 leverage can hold a position in the forex market of $100,000 with a margin of $1,000. For a 200:1 leverage, the client will need a $500 margin to hold the same position.
Leverage increases the potential of high return when the market moves in a trader’s favour. However, traders are to note that leverage will similarly act against them when the market moves against their predictions.
Leverage Levels
Different leverage levels apply to different account types.
Margin Requirement
Prior to opening a position in the market, an initial deposit is required when an trader opens an account with a broker. This cash deposit will act as a deposit to cover any credit risks that the trader might undertake. Depending on the agreement, the investor could be able to leverage up to a certain limit as set by the broker.
The margin requirement for a forex trade is calculated using the following formula:
Margin = (Lot Size * Contract Size * Opening Price) / Leverage
The examples below are based on a Standard/Classic account with a leverage of 100:1.
| Forex | Margin requirement for one standard contract position in EUR/USD at 1.2500 is calculated as follows: Margin = (1 * 100,000 * $1.2500) / (100) = $1250.00 |
|---|---|
| Spot Gold | Margin requirement of one standard contract position in Gold at 1579.01 is calculated as follows: Margin = (1 * 100 * $1579.01) / (100) = $1579.01 |
| Spot Silver | Margin requirement for one standard contract position in Silver at 28.70 is calculated as follows: Margin = (1 * 5000 * $28.70) / (100) = $1435.00 |
Note: Interest is not required to be paid on the borrowed amount, but if the investor decides to hold his position overnight, interest will be charged as the rolled over rates on the total positions held.
Margin Call
Margin Call is a level set by a brokerage that defines the minimum amount of money required to trade in the market. When your account falls below the margin call level, you will need to make an additional deposit to maintain your positions. Alternatively, you can close some of your positions to reduce your required margin. At Blackwell Global, Margin Call is set at 80%.
Stop Out Level
In the event you are unable to maintain sufficient funds in your account after hitting Margin Call, and if your account value depreciates to the Stop Out level, your positions will be closed automatically to prevent further loss to your capital. At Blackwell Global, Stop Out level is set at 50%.
Swaps
Also referred to as Rollover Interest, swaps are charged when holding onto a position overnight due to the difference in interest rates between the base metal and the quote currency.
Blackwell Global deals CFDs trading on a “spot” basis. Trades are all settled two business days from inception as per market convention. Swaps are automatically calculated and settled at 21:59 GMT (Server Time 22:59) on a daily basis. Blackwell Global does not arrange for physical delivery.
Open positions on a trade date basis that are held from Wednesday to Thursday will be charged three times the value. The extra payment is to cover the interest that would normally have been charged on Saturday and Sunday when the market is closed.
Please note that some CFD products will have a dividend payout on certain days. This dividend will reflect in that day’s swap, so the swap may have a fluctuation on the dividend payout date.
| Symbol | long | short |
|---|
Example 1 Trading on the Futures Exchange
| Day 1 | WTI Crude Oil is at $106.11 SHORT 8 futures contracts at $106.11 Opening value = 8 X 1000 (contract size) X $106.11 = $848,880.00 Margin requirement (Capital outlay) = $848,880.00 X 1% = $8,488.80 |
|---|---|
| Day 2 | WTI Crude Oil drops to $105.20 CLOSE 8 futures contracts at $105.20 Closing value = 8 X 1000 (contract size) X $105.20 = $841,600.00 P & L = Payoff – Exchange/Futures Commission Merchant fees (sell and buy) = ($848,880.00 – $841,600.00) – ($15×2) = $7,250.00 |
Example 2 Trading of Crude Oil Futures CFD
| Day 1 | WTI Crude Oil is at $106.11 SHORT 8 lots at $106.11 Opening value = 8 (lots) X 1000 (contract size) X $106.11 = $848,880.00 Capital outlay (based on margin of $1500 per lot) = $1,500 x 8 =$12,000.00 |
|---|---|
| Day 2 | WTI Crude Oil drops to $105.20 CLOSE 8 lots at $105.20 Closing value = 8(lots) X 1000 (contract size) X $105.20 = $841,600.00 P & L = Payoff + Rollover interest=($848,880.00 – $841,600.00) + (-$32.07) = $7,247.93 |
Example 3 Trading of Index CFD
| Day 1 | S&P500 Index is at 1,677.00 BUY 5 lots at 1,677.00 Opening value = 5 lots X 50 (contract size) X 1,677.00 = $419,250.00 Capital outlay (based on margin of $1500 per lot) = $1,500 x 5 = $7,500 |
|---|---|
| Day 2 | S&P500 Index rises to 1,686.20 CLOSE 5 lots at 1,686.20 Closing value = 5 lots X 1 contract size X 1,686.20 = $8,431.00 P & L = Payoff + Rollover interest = = ($8,431.00 – $8,385.00) + (-$0.38) = $45.62 |
Blackwell Global Investments Limited is a company incorporated in New Zealand, company number 3038690, with its registered office at Level 5, 59 High Street, The Southern Cross Building, Auckland 1010, New Zealand. Blackwell Global Investments Limited is a member Company of the Blackwell Global Group.
Forex and CFDs are leveraged products and you may lose your initial deposit as well as substantial amounts of your investment. Trading leveraged products carries a high level of risk and may not be suitable for all investors, therefore please consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. Please read and understand the risk disclosure policy before entering any transaction with Blackwell Global Investments Limited.
The information on this site is not directed at residents of certain jurisdictions, including US, Belgium, Iran, New Zealand, North Korea, and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
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