Stock trading involves the buying and selling of shares in a particular asset or company. A stock trader will purchase shares, own them and then sell them, depending on the market value of the stock.
Much like currency markets, stocks are exclusively available to trade at Orbex via CFDs, or Contracts for Difference. This means that you can trade the price movements of a particular asset or company, without purchasing the physical shares themselves.
If you believe the price of a stock CFD will go up, you may take a long (buy) position. If you believe the price of a stock will go down, you may choose to take a short (sell) position.
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Margin % Example: AO Stock indicates that 35% of the instrument’s price is required to open 1 lot. For example: If AO today’s price is 56.80, then to open 1 lot of AO, you need 19.88 GBP.
Commission: The charge is 0.2% for each 1 lot you are trading, applicable only on UK and EU stocks. For example: If AO today’s price is 56.80 USD, then you multiply 56.80 * 0.002 = 0.11 GBP.
*Stock CFDs are subject to corporate actions and Swaps.
The formula for working out your profit or loss for any CFD share is as follows:
Long: (Buying) profit or loss = (exit price – entry price) * lots traded
Short: (Selling) profit or loss = (entry price – exit price) * lots traded
You decide to buy 100 AAPL CFDs at $45 ,
The share price rises to $50 based on the company’s quarterly earnings.
You sell 100 AAPL CFDs at $50
Using the formula above for a long trade:
Profit or loss = (exit price – entry price) * lots traded
The result would be +$500
You decide to sell 5 Amazon CFDs at $1,900 as you are expecting the price to fall.
However, the price goes up based on increasing company sales.
Therefore, you decide to close your position at the price of $1,919.
Using the formula above for a short trade:
Profit or loss = (entry price – exit price ) * lots traded
The result would be -$95.
Corporate Actions Formula
The basic formula used is d = p x n
d = dividend
p = position
n = dividend declared/number of index points (dividend amount)
Here’s the calculation we use for the dividend for equities:
A client opens a long (buy) position on 10,000 CFD shares of Apple (AAPL.OQ), with a net dividend declared at 2p.
The calculation is:
d = 10,000 x 0.02 = $200 (credited).
Another example we can look at is that a client opens a short (sell) position on 5,000 CFD shares of Deutsche Bank (DBKGn.DE), with a net dividend declared at 5p.
The calculation is: d = 5,000 x 0.05 = €250 (debited).
Commission on Stock CFDs*:
*Orbex is running ‘0 Commissions Promotion’ across all stock CFDs. This promotion is valid on Starter Accounts for a limited time only.
The commission applicable on shares is 0.0016 based on the notional value of the number of shares traded as following.
(Lots * shares price * commission percentage)
For example, let’s say a client opens a long (buy) position with 10 CFD shares of Apple (AAPL.OQ).
The market price at the time is 160 USD, and the commission is 0.0016 Therefore, the commission calculation is:
10 shares * $160 * 0.0016 =$2.5
For more information on trading Stock CFDs, feel free to contact your account managers. For any other inquiries, please email email@example.com. To start trading Stock CFDs:
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Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Orbex does not offer its services to residents of certain jurisdictions such as the USA, Iran, North Korea, Indonesia, Mauritius, and Romania.
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