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CFDs Trading Conditions

• Introduction
• Index CFDs
• DMA CFDs
• Commodity CFDs
• Trading Rates
• Trading Conditions
• Learn About CFDs
• FAQ

Stock CFD Margins

Stock CFDs are offered under a number of margin groups with margin requirements that depend on the Market Capitalisation, liquidity and volatility of the stock.

Margin Group	Category	Minimum Margin	Reuse of Collateral
Group 1	Indices	2.5%	N/A
Group 2	Low risk stocks	5%	75%
Group 3	Medium risk stocks	10%	75%
Group 4	Medium to High risk stocks	15%	50%
Group 5	High risk stocks	25%	50%
Group 6	High to Very High risk stocks	50%	0%
Group 7	Very High risk stocks	75%	0%
Group 8	Extreme risk stocks	100%	0%

Refer to CFD Margin Groups for which margin group a particular stock is currently traded under.

You must maintain funds in your account to cover your CFD exposure at all times.

Index CFDs

Index CFDs are over-the-counter products where the price is established by the Authorized Sub- Contractor. Index CFDs aim to reflect the fair value of the underlying index but the actual bid and ask price may differ slightly from the actual index level.

Index CFD Margin Requirements

For index CFDs, you must maintain a minimum of 5% of the investment value in your account to cover your CFD exposure at all times.

COMMODITY CFD CONDITIONS

Commodity CFD lot sizes are a fraction of the Future
Commodity CFDs are denominated in smaller lots than the underlying future. For example, the US Crude CFD is 25 barrels of oil, rather than 1,000 barrels. Each CFD is quoted as 1 unit of the underlying contract (e.g., 1 barrel), but there will be a minimum trade size.

Greater leverage compared to the Future
CFD margin requirements are lower than the underlying future, offering more exposure for less. Authorized Sub-Contractor's half-margins also apply to Commodity CFDs, lowering margin requirements even further for the first €50,000 (or equivalent) of collateral required on your account.

No commissions on Commodity CFDs
A commission is not charged, but there is a spread included in the price the Authorized Sub-Contractor derives for each CFD. This derivation means that whilst the CFD prices track the underlying future they are not exactly the same.

Commodity CFDs expire each month
Like futures, Authorized Sub-Contractor's Commodity CFDs will expire each month and will be cash settled on the expiry date of the underlying future. Front month (current contract) and back month (following contract) will be offered to enable clients to manually roll positions from one contract to the next.

Expiry
The specific expiry date and time for individual Commodity CFDs can be found in the trading platforms on either the Trade or Order tickets plus the Instrument Information pages.
Trading will cease at the specified time listed in the table above for each contract. Clients should pay attention to when the Last Trade Day will take place as it differs contract to contract and month to month.
Currently we do not support the automatic rolling of positions from one month to the next. Any positions still open at the close of trading on the Expiry Date will be automatically closed at the closing price set by the Authorized Sub-Contractor and cash settled.

Supported order types
Limit, Market, Stop, Stop Limit and Trailing Stop orders are supported. In addition you are able to place If-Done and One-Cancels-Other (OCO) orders.

Commodities CFDs margin requirements
For Commodities CFDs , you must maintain a minimum of 10% of the investment value in your account to cover your CFD exposure at all times.

Other information

• Romcapital will always quote the current expiring month’s contract and the following contract for trading. There will always be at least two contracts available per commodity.
• Commodity CFDs give clients exposure to the underlying commodity without the confusion of physical settlement. All Commodity CFDs transactions will be cash settled.
• Commodity CFDs are over-the-counter products with a price established by Romcapital. Commodity CFDs aim to reflect the value of the underlying commodity future, but the actual bid and ask price may differ from the actual future.
• Prices shown to clients in the trading platforms reflect the underlying future with the Target Spread above applied. It is important to understand that the spread quoted is in addition to the spread in the underlying market.
• Trading Commodity CFDs will not incur any overnight financing charges. All costs are factored within the trading spread.

Whilst all Commodity CFDs are priced in single units, often a minimum trade size will apply. However, clients are able to reduce an open position to below the minimum trade size. Should you be left with such a position then it should be closed via either the Account Summary or by contacting the trading desk.

CFD Interest and Accrual Rates

If you hold a CFD after the stock market closes, you are subject to a financing fee or accrual:

• When you buy a CFD, you are subject to a financing charge at the Inter-Bank Offer Rate for the currency in which the share is traded (e.g. LIBOR plus 3%)
• When you short sell a CFD, you receive an interest accrual at the Inter-Bank Bid Rate for the currency in which the share is traded (e.g. LIBID minus 2.5%)

If you open and close a CFD position within one trading day, you are not subject to these charges or accruals.

Currency Conversions

Currency conversions of trading costs as well as profits and losses from trading activities are done using the prevailing close rate as of 17:00 New York Time, plus/minus 0.5%.

Short Selling CFDs

When short selling a CFD directly on an exchange (that we do not market-make), you will be affected by the rules for the stock market in that country. For example:

• For US CFDs, an up-tick rule applies where you can only short sell on an up-tick
• For Australian CFDs, you may experience limitations on the amount of CFDs you can short trade in a single day due to limited borrowing availability in the underlying market

When short selling CFDs, you can experience forced closure of a position if your CFDs get recalled. The risk is particularly high if the stock becomes hard to borrow due to takeovers, dividends, rights offerings (and other merger and acquisition activities) or increased hedge fund selling of the stock.

Dividends on CFD Positions

Holders of long CFD positions will, when dividends are paid on the underlying share, qualify for a proportional payout. Holders of short CFD positions will have to pay an amount equal to the full (gross) dividend paid on the underlying share.

The amount will be credited/debited your trading account on ex-date, unless the dividend rate is unconfirmed in which case the dividend is paid on pay date (e.g. ADR's).

Dividends on CFD positions are are cash adjustments paid and debited by the Authorized Sub-Contractor and not by the underlying company. Dividends paid on CFDs are not eligible for any preferential withholding tax rates sometimes associated with dividends paid on physical stocks and may therefore differ from the dividends payable on the underlying share.

Interest on Short Index CFD Positions

Interest will not be paid on short Index CFD Positions. Interest will only be applied to long CFD positions.

Partial Fills

Partial fills may occur on limit orders and the remaining amount stays in the market as a limit order and may be filled within the order duration.

Market orders can be filled at numerous levels, the price paid will be the volume weighted average price of all the fills.

Nordic Markets

Orders traded in the Nordic markets (Denmark, Sweden and Norway) are split into an "Even lot" which will be traded, and a remainder which will be routed to the odd-lot book.

When part of an order is routed to the odd-lot book, limit orders will be filled if possible or left on the book until a fill is possible. A market order will be filled immediately if possible, and will otherwise be cancelled (fill or kill principle).