## Going long

With CFD trading your profit or loss is determined by the difference between the buy and the sell price of the financial instrument that you are trading. Imagine this scenario about a fictional oil company called North Sea Oil PLC (NSO):

North Sea Oil Plc is trading at 15.99/16.00. You think the price is going to rise in value so you decide to go long and buy 1000 NSO CFDs at €16. 1000 CFDs at €16 giving you a position size of €16,000 (1000 x €16 = €16,000).

### Margin

The margin requirement with CMC Markets for NSO is 10%, therefore €1,600 will be allocated from your account against this trade as initial margin.
€16,000 x 10%= €1,600
.
Remember if the share price moves against you, it is possible to lose more than this €1,600 initial margin.

### Commission charge

Equity CFDs attract a commission charge of 8 basis points. One basis point is 0.01 of a percentage point. To determine how much commission you would pay, you multiply your position size by the commission charge. In this example the charge is €12.80 (€16,000 x 0.08%=€12.80).

You now hold a position of 1000 NSO CFDs with a value of €16,000. Later that day you notice that the NSO share price has risen to 16.25/16.26. This would mean that your previous assumption that the price would go up was right. You chose to close your position and sell at €16.25.

### Closing the position

You originally bought at €16 and sold at €16.25 which means NSO rose by €0.25. €0.25 x 1000 CFDs = €250 revenue. The commission charge of 8 basis points will also apply to the closure of the trade, equalling €13.

After deducting the commission charges from the total revenue you realise a profit of €224.20. Had the market moved against you (i.e. the share price of NSO had fallen in value) by 25 points you would have lost €250 plus commission.

## Going short

With CFD trading your profit or loss is determined by the difference between the buy price and the sell price of the financial instrument that you are trading. Imagine this scenario about fictional oil company called North Sea Oil PLC (NSO):