How to Trade Wheat CFDs

Wheat CFD Example You bought 1 CFD contract for wheat at the price of 520 cents per bushel and sold it at the price of 522 cents. The difference is 2 cents. One CFD contains 5000 bushels (like in a standard exchange contract, for example, on the CME Group). So, your profit is 5 000 × 2 cents = 100 dollars. Long position (purchase) An investor decides to buy Wheat CFD quoted 515 (bid)/516 (offer), and buys 5 contracts at the price of 516 cents per bushel (let's recall: 1 contract contains 5,000 bushels of wheat). - Buy price of wheat is 516 cents - Quantity of contracts is 5 - Value of 5 wheat contracts is 129000 (5.16*5*5000) - Margin required is 8000 US dollars (2300*5) - Investor freezes only 8000 dollars on the account in order to get control over wheat in the value of 129000 USD Position closing Five days later wheat is quoted 525/526 cents per bushel, and the investor decides to close this position by selling an identical set of contracts, namely 5 contracts. The investor sells those at the «bid» price, i.e. 525 cents. - Sell price for wheat is 525 cents - Quantity of contracts is 5 - Wheat value is 131250 US dollars (5.25*5*5000) - Net profit per the transaction is 2250 US dollars - The return is 28% on the capital invested in just 5 days