Trading Examples

Please read the sections on mechanics, dividends and interest for a more detailed explanation of the concepts used in the examples below or alternatively contact an adviser at CKL for assistance.

Example 1: Going Long (Buying to open a position)

You expect Coles Myer to announce good profit results to the market and anticipate its price could rise by 7% over the next sixteen days.

Trading example of buying a stock to open a position

Open Position
Buy Quantity	5000
Buy Price	$9.10
Contact Value (5 000*9.10)	$45 500
Initial Margin 10% (0.10* 45 500)	($4 550)
Commission of 0.30%  (.003*45 500)	($136.50)
Close Position
Sell Quantity	5 000
Sell Price	$9.72
Contact Value (5 000*9.72)	$48 600
Commission of .30% (.003*48 600)	($145.80)
Gross Profit (48 600-45 500)	$3 100
Financing Cost
Libor  rate at 5.25%+3%(funding rate)=8.25%
45 500 * .0825 *16/360	($166.83)
Net Profit  (3 100-166.83-145.80-136.50)	2 650.87
Alternatively: your expectations prove to be incorrect and your stop loss is triggered
Close Position
Sell Quantity	5 000
Sell Price	$8.92
Contact Value (5 000*8.92)	$44 600
Commission of .30% (.003*44 600)	($133.80)
Gross Loss (44 600-45 500)	($900)
Financing Cost
Libor  rate at 5.25%+3% (funding rate)=8.25%
45 500 * .0825 *16/360	($166.83)
Net Loss  (-900-166.83-145.80-133.80)	($1 337.13)

* Please note for the purpose of this example the Libor Rate is fixed at 5.25% and the funding rate at 3%

Example 2: Going Short (Selling to open a position)

You anticipate that the rally in BHP Billiton shares has peaked and anticipate that it could fall by as much as 8% over the next ten days.

Trading example of selling a stock to open a position

Open Position
Sell Quantity	5000
Sell Price	$14.90
Contact Value (5 000*14.90)	$74 500
Initial Margin 10% (0.10* 74 500)	($7 450)
Commission of 0.30%  (.003*74 500)	($223.50)
Close Position
Buy Quantity	5 000
Buy Price	$13.71
Contact Value (5 000*13.71)	$68 550
Commission of .30% (.003*68 550)	($205.65)
Gross Profit (74 500-68 550)	$5 950
Financing Interest Earned
Libid rate 5.00%-2.5%(funding rate)=2.5%
74 500 * .025 *10/360	$51.74
Net Profit  (5950-223.50-205.65+51.74)	$5 469.11
Alternatively: your expectations prove to be incorrect and your stop loss is triggered
Close Position
Buy Quantity	5 000
Buy Price	$15.20
Contact Value (5 000*15.20)	$76 000
Commission of .30% (.003*76 000)	($228)
Gross Loss (74 500 -76 000)	($1 500)
Financing Interest Earned
Libid rate 5.00%-2.5%(funding rate)=2.5%
74 500 * .025 *10/360	$51.74
Net Loss  (-1500-228-223.50+51.74)	($1 899.76)

* Please note for the purpose of this example the Libid Rate is fixed at 5.00% and the funding rate at 2.5%