CFD Stocks

Contracts for Difference (CFDs) are one of the world’s fastest growing trading instruments — considered by many investors as preferable to common stock.

A CFD is a financial derivative that is traded on margin under the Alternative Trading System (SPA). This enables investors and traders to participate in the market movement of shares without having to physically own them. There is no restriction on the entry or exit price of a CFD, no time limit is placed on when this exchange happens and no restriction is placed on buying first or selling first. CFDs are traded on leverage — giving traders more flexibility and opportunity.

Japan CFDs

Monex offers CFD shares derived from blue-chip stocks of major companies listed in the Japan Stock Exchange — including Sony, Toyota, Yamaha, Toshiba among others. The opportunity to leverage allows traders to execute transactions with less capital in a highly liquid market.

Advantages

  • Initial margin of only 10% to secure a trade.
  • Ability to go short. Traders can profit in both bullish and bearish markets.
  • No expiry date.
  • Ability to place orders just like in ordinary stock markets.
  • Low commissions and spreads.
  • Holders of long CFD positions stand to gain on dividends if and when they are distributed.
  • High liquidity with instant execution on both buy and sell orders.
  • Online trading with the Monex Trader platform.

Illustration

Assume that you are expecting the share price of Sony Corp to rise. You buy 1,000 shares of Sony Corp at 1,600. Over the next few days, the share price of Sony Corp actually rises and you liquidate your position at 1,800.  
Your profit or loss will be calculated as below:
= ((Selling price – Buying price) x Number of shares) / rate USD/JPY
= (¥1,800 - ¥1,600) x 1,000 shares = ¥ 200,000
= ¥ 200,000/ 77.500 = $ 2,580*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.

Hong Kong CFDs

Monex offers Hong Kong CFD shares derived from the stocks of blue-chip company companies such as HSBC, Cathay, Bank of China, China Mobile among others. The opportunity to leverage allows traders to execute transactions with less capital in a highly liquid market.

Advantages

  • Initial margin of only 10% to secure a trade.
  • Ability to go short. Traders can profit in both bullish and bearish markets.
  • No expiry date.
  • Ability to place orders just like in ordinary stock markets.
  • Low commissions and spreads.
  • Holders of long CFD positions stand to gain on dividends if and when they are distributed.
  • High liquidity with instant execution on both buy and sell orders.
  • Online trading with the Monex Trader platform.

Illustration

Assume that you are expecting the share price of HSBC-HK to fall. You sell 1,500 shares at the price of HK$65.00. Few weeks later, the share price of HSBC-HK actually falls and you liquidate your position at HK$61.00.
Your profit or loss will be calculated as below:
= ((Selling price – Buying price) x Number of shares) / rate USD/HKD
= (HK$65.00 – HK$61.00) x 1,500 shares = HK$ 6,000
= HK$ 6,000/ 7.7500 = $ 774.19*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.

United States CFDs

Monex offers American CFDs derived from the stocks of major blue-chip companies listed on the NYSE and NASDAQ — such as Apple, Citigroup, Google, Boeing, MC Donald’s and Coca-cola. The opportunity to leverage allows traders to execute transactions with less capital in a highly liquid market.

Advantages

  • Initial margin of only 10% to secure a trade.
  • Ability to go short. Traders can profit in both bullish and bearish markets.
  • No expiry date.
  • Ability to place orders just like in ordinary stock markets.
  • Low commissions and spreads.
  • Holders of long CFD positions stand to gain on dividends if and when they are distributed.
  • High liquidity with instant execution on both buy and sell orders.
  • Online trading with the Monex Trader platform.

Illustration

Assume that you are expecting the shares of Citigroup to rise. You buy 1000 shares of Citigroup at the price of US $30.00. The CFD share price actually rises and you decide to liquidate your position at US $33.00
Your profit or loss will be calculated as below:
= (Selling price – Buying price) x Number of shares
= (33.00 – 30.00) x 1,000 shares
= $ 3,000*

* The calculation above was made as an illustration only. Transaction costs and commission fees are excluded. Results may vary depending on the direction of the price movement.