Example of going short (loss)

1. ABC Corp is trading at 159/160 and you think the price is going to fall in value.
2. You decide to sell ABC Corp CFDs at 159.
3. You decide to sell 1000 share CFDs with the value of £1590 and are charged £20 commission.
4. Your margin requirement with RBS Spread Trading for ABC Corp is 5% therefore £79.50 will be allocated from your account against this trade as initial margin. Remember if the share price moves against you, it is possible to lose more than this £79.50 initial margin.
5. Two days later you see that ABC Corp has risen to 179/180.
6. Therefore you choose to buy CFDs at 180 and realise your loss.
7. You sold CFDs at 159 and bought at 180 which means ABC Corp rose by 21p.
   21p x 1000 share CFDs = £210 loss plus £20 commission.
8. You held the position for two days, and because you went short you were effectively loaning us money, so you receive two nights financing charge. This is how you calculate the financing you will receive;
   [(£1,590 X (LIBOR - 2.5%))/365] X 2 = 20p. LIBOR in this case is 4.75%.
9. This financing payment is taken away from your loss to realise a total loss of £249.80.