Profit (or Loss) = (Selling Price - Bought-in Price) x Contract Size x No. of lots
(Suppose the cost on interest is zero.)
Example: Bought 2 lots of crude oil RF
Suppose an investor who prospect crude oil price will rise in the coming days and decide to buy crude oil RF. Each lot of crude oil RF gives a contract size of 1,000 barrels and the minimum fluctuation US$ 0.01 that brings to a change of US$ 10.00 of profit (or loss).
|
Bought 2 lots of crude oil RF at 9:45 am |
|
Bought-in Price: |
US$ 90.00 |
|
Capital Paid |
US$ 2,000 x 2 = US$ 4,000 |
|
Sold 2 lots of crude oil RF at 2:00 pm |
|
Selling Price |
US$ 92.00 |
|
Profit (or Loss) |
US$ (92.00-90.00) x 1,000 x 2 = US$ 4,000 |
|
Investment return (%) |
4,000/2,000 =200% |
|
Crude oil price fluctuation (%) |
(92.00-90.00) / 90.00 x 100% = 2.22% |
The above crude oil RF transaction showed how to achieve an impressive return by using leverage system. However, investors should be aware that the greater the leverage, the greater the risk.
|
Bought 2 lots of crude oil RF at 9:45 am |
|
Bought-in Price: |
US$ 90.00 |
|
Capital Paid |
US$ 2,000 x 2 = US$ 4,000 |
|
Sold 2 lots of crude oil RF at 2:00 pm |
|
Selling Price |
US$ 89.01 |
|
Profit (or Loss) |
US$ (89.01-90.00) x 1,000 x 2 = (US$ 1,980) |
|
Investment return (%) |
(1,980/4,000) = (49.5%) |
|
Crude oil price fluctuation (%) |
(89.01-90.00) / 90.00 x 100% = (1.1%) |
Note:
1. KAB Strategy (Cyprus) Limited accepts cash settlement for the above investment products only.
2. KAB Strategy (Cyprus) Limited reserves the right to amend the above information without advance. |
