CFD Trading Examples

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This page is general information, not financial advice. Advertiser disclosure.

A CFD trading example is a worked calculation that shows how a leveraged position gains or loses money against its margin once the spread or commission is counted. Two GBP examples below cover a forex buy and a share-CFD sell, each with a winning and a losing outcome.

Assumes a GBP/USD rate near 1.25, a 0.6-pip spread and 0.08% share-CFD commission. Illustrative advertised rates, checked July 2026.

Buy example going long on GBP/USD

Suppose you buy 20,000 units of GBP/USD, about £20,000 of exposure, at the 30:1 major-pair cap, posting roughly £667 in margin. Each pip is worth about £1.60 at a GBP/USD rate near 1.25. A 150-pip rise earns about £240 before costs, and the 0.6-pip spread costs about £1, so roughly £239 net. The same 150-pip fall costs about £240 plus the spread, roughly £241, charged against your £667 margin, over a third of it gone on one losing trade. That asymmetry between position size and margin is the whole point of a worked example. The deposit is small, the exposure is not. The 30:1 figure comes straight from the FCA’s PS19/18 leverage rules, and how margin close-out works sets the point at which a losing position is shut.

Sell example shorting a UK share CFD

Share CFDs carry the 5:1 retail cap, so a £5,000 short position on a UK share needs about £1,000 in margin, with cost charged as a commission rather than a spread. Assume 0.08% per side, about £8 on the round turn. If the share falls 4%, the short gains about £200 before costs, roughly £192 net. A 4% rise instead loses about £200 plus commission, roughly £208 against your £1,000 margin. Shorting a CFD profits from a falling price, which buying the share outright cannot do.

What is the all-in cost of a CFD trade?

Every example has to include cost to be honest. For forex, the cost is the spread, and sometimes a commission on raw accounts. Share CFDs usually cost a commission plus overnight financing on positions held past the daily cut-off. A trade that looks profitable on price can be flat or negative once the all-in cost is counted. Because the spread is the main cost on the FX side, it is worth comparing lowest spread forex brokers before sizing a live position.

Held overnight, the same positions start paying financing. A long £5,000 share CFD charged at the Bank of England Bank Rate plus about 2.5%, an illustrative all-in rate near 6.5% on recent levels, costs roughly £0.90 per night, about £4.50 over a trading week, or more than half the round-turn commission. Financing is why CFDs suit short holding periods, and why a multi-week view is usually cheaper in the underlying or an ETF.

The table below restates the two worked examples in structured form, each with its winning and losing outcome.

Commission assumes 0.08% per side with a minimum charge. Both trades are closed the same day, so no overnight financing applies.

Common mistakes

• Reading only the price move and ignoring the spread or commission flatters every example.
• Forgetting overnight financing on multi-day positions understates the real cost.
• Sizing from the margin rather than the position leads to risk far above the intended pound amount.

Comparing costs across FCA-regulated broker reviews before opening an account avoids this mistake entirely.