Good Day All Thank you very much on the infomation on NIL PAID LETTERS. Prancing Horse you seem to be quite up to CFD's can you explain a little more becaus an academic digestion is a bit difficult for me and i think it will be easier coming from you.You know layman's language.
CFDs like a packet of smokes, comes with serious health warnings. Before you attempt trading them you must attend a course, then be prepared to lose money when you start, if beginner's luck is with you to start , you will get a big smack down the line as you will fall into the trap that this is money for jam. In a nutshell , if you buy a share say trading at R100 & you buy 1000 of them , you will have to have R15000 as a margin, if the margin required is 15% as your exposure is now R100000. You will pay the (SABOR ),S A Benchmark Overnight Rate plus 2% on the full value of R100000. Your cost of purchase and sale is also based on the total value and this varies from house to house some .2 others maybe .4% on the full exposure. If the share moves to R95 they will knock on your door for an additional R5000 margin, if it goes to R105 your up R5000. Looks simple , but remember the costs creep up on you. You have been warned.