CFDs trade example - Long position (buy) Having decided that shares price of IBM company is going to increase, a trader buys them for 82.50 dollars per share in the amount of 100 shares (1 lot). In this case the necessary sum makes up 100×82.50=8250 dollars. To carry out this transaction with the use of 1:10 leverage the trader needs to have the sum deposited 10 times as less than the necessary sum, i.e. 825 dollars (this sum is called margin and will be used by the broker for this transaction). As a result, upon a few days the price increases up to 85 dollars per share and the trader sells 100 shares at this price gaining 8500 dollars. Thus, the trader’s net profit makes up 8500–8250= 250 dollars or over 30% for the margin employed in the transaction ($825) in spite of the fact that the share rose only by 3%. - Short position (sell) Similarly a sell contract with regard to shares value is concluded, when first the trader gives the broker a bid to sell, for example, 100 Microsoft shares at the price of $25.3 per share gaining 2530 dollars from the sale (the margin with the use of leverage will make up 1/10, i.e. $253). After quotation declined to 24.1 the trader buys them back for an essentially lower sum which is $2410. Summarized, these two transactions will result in the trade profit of this contract for difference as follows: 2530–2410= $120 or 47% of the trader’s margin employed. | 
