Question

Price of  one Omantel share	Bid	Offer (Ask)
15 August	1.100	1.150
16 August	1.200	1.250

Assume that price of Omantel share stayed the same until market close on the  15^th August.

Contract for Difference on Omantel Share

Margin requirements 5%

Overnight financing charge LIB0R%+2%  (Assume a year has 365 days), LIB0R=0.63%

Commission for buying 0.1% of value of transaction    

Commission for selling 0.1% of value of transaction.

You are using a CFD for buying 1000 shares

Assume you have bought 1000 shares on 15^th August  and  sold them on 16^th August.

Calculate your gross  profit and net profit

Answer 1

On 15th August 1000 shares are bought @ 1.150 as ask rate has to be used as the person is buying the shares.

Total buying price = 1000 * 1.15 = 1150

Margin = 1150 *5% = 57.50

Financing rate = LIBOR + 2% = 0.63 + 2 = 2.63%

Financing charge = 57.50 * 2.63% * 1/365 = 0.0041

Loading charge on buying = 1150 *0.1% = 1.15

Total selling amount = 1000 * 1.20 = 1200 (here bid rate is used as the person is selling the shares )

Loading charge in selling = 1200 *0.1% =1.20

Gross Profit = Selling price - buying price = 1200 - 1150 = 50

Net Profit = Gross profit - loading charges - marfgin charges

= 50 - 1.15 - 1.20 - 0.0041 =$47.6459