How to calculate profit with CFD trading

At IQ Option, the profit in CFD trading depends on which position you open buy or sell.

How to calculate profit for the long position

If you are buying an asset and thinking that it will grow in value your position then it is called long.

There is a formula to calculate the long positions: closing price / (opening price – 1) x leverage x investment.

Let us consider an example: John invested $1000 to buy stocks of ‘A’ company at the opening price of 12 dollars. He applied leverage of one to five. And the stock cost went to $15 when John closed his position. Let’s calculate his profit with the help of the formula.

John made a profit of $1250.

Calculate profit for the short position

When you think to sell an asset, you don’t own expecting then that will decrease in value your position it is called short.

To calculate the profit in a short position, the formula is (1 – closing price) / opening price x leverage x investment.

Let us consider an example: Stephen used $5000 to sell stocks of an ‘A’ company. When the position opened the price of the stock was $13 and when Stephen closed his position at $11. Stephen traded with a leverage of one to three.