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The following is an example of trading Rates and Bonds with Trade Real-Time.
OPENING THE POSITION
You believe the ECB base rate will fall and therefore the price of the Bund will rise. You check the real-time price for our German Bund online; the price is showing 11674/11678 and you decide to buy three contracts at 11678.
One contract is the equivalent of E10 per point (effectively a 1% change in the par value).
As you predicted, interest rates do fall and the price of the Bund rises accordingly. You check our current quote, and we are making 11745/11749. You close your position by selling three contracts at 11745.
Your profit on the trade is calculated as follows:
PROFIT ON TRADE
| Closing level | 11745 |
| Opening level | 11678 |
| Difference | 67 |
Profit: 67 points x 3 contracts x E10 per point = E2010
The trade referenced above would have had a corresponding loss associated with it if the trader had taken short position. Trading on margin magnifies both the profit and loss of any trade.
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