CFDQ - CFD Trades Enquiry
What is CFDQ
CFDQ provides several styles of report for tracking the account (client and broker) positions and equity requirements. CFDQ also permits viewing of matured/settled trades for historical analysis.
A CFD is an equity derivative linked to the underlying share price, which allows the investor an appealing means of financially benefiting from a rising (when long) or falling (when short) share price without the need of investing in the underlying physical share. As such, the investor has no rights or obligations relating to the underlying share. A holder of a CFD contract has no shareholder voting rights, conversely, there is no stamp duty liability to pay.
In simple terms, a Contract For Difference is an agreement between two parties to exchange, at the close of the contract, the difference between the opening price and the closing price of the contract, multiplied by the number of shares specified within the contract.
Features of CFD are:-
Gearing
Holders of a long or short CFD do not pay the full underlying value of the contract, however, they are required to deposit margin as collateral. Margin is typically calculated as 20% of the contract value e.g. a client wishing to go long or short a CFD worth £100,000 needs to deposit as collateral just £20,000 to secure the contract, thereby gaining five times leverage.
Selling Short
A CFD has the ability to allow the investor to take advantage of anticipated price declines in an underlying share. The ability to go short is one of the principal attractions of CFDs as it was previously a costly and complicated procedure available only to significant and sophisticated investors.
Costs
The only cost relating to a CFD transaction is a commission charge. There is no stamp duty, or PTM levy (a charge on every physical share transaction made by the Panel of Takeovers and Mergers). The commission varies by market, size and frequency of trading, but is usually a percentage of the full contract value.
Funding
The broker effectively finances the value of the trade to a long CFD investor and therefore charges interest, if the investor has sold the CFD he will receive interest. Likewise, when purchasing a CFD, the investor will receive between 80-90% of any dividend payment due on the underlying share which will be credited to the account, conversely, when short the CFD then 100% of any dividend payment will be debited from the account.
Physical SHARE administration is handled by SHARE