ETFs

ETX Capital provides access to a variety of Exchange Traded Funds

Here is the full list of the ETFs you can trade CFDs on:

What is ETF trading?

ETF funds or Exchange Traded Funds track the performance of an index, commodity or a collection of assets, but are traded like a stock. They were designed to enable investors to trade bundles of shares.

All about ETF trading

The value of an ETF will be influenced by the underlying instruments on which the fund is based, whether that is tracking a particular stock index or following the movements of certain commodities.

ETF CFD trading example

Here is an example of an ETF CFD trading trade:

You are convinced that the Australian markets are going to climb, so you want to buy on the MSCI Australia Index.

You are quoted 6,076 - 6,079 and decide to 'buy' at the higher figure, betting £1 per point of movement.

In order to cover this trade, you will need to meet the minimum margin rate of ten per cent, which is worked out as follows:

£1 per point x 6,079 x 10 per cent = £607.90

By the end of the trading day, the Australian market is up and is now being quoted at 6,096 - 6,099. You decide to close your position by 'selling' at the lower figure.

Your profit will be calculated like this: 6,096 - 6,079 = 17 x £1 = £17

If you believe the market will continue to rise, you can leave the bet open overnight, although you will need to factor in the overnight financing charge.

To work this out, you need to calculate the total consideration of trade - in this case that would be £1 x 6,079, so £6,079.

This is then multiplied by the LIBOR rate (let's say that is one per cent) plus our 2.5 per cent overnight charge - 3.5 per cent in total - and then divided by 365 and multiplied by the number of days you leave your trade open for.

For instance, if you keep the position open for two days, you will have to pay the following overnight financing charge:

£6,079 x 3.5 per cent / 365 x 2 = £1.16

Had the Australian market fallen, you would have stood to lose £1 for every point it moved lower.

Appendix

1. Spreads

The ETX Capital spread is added to both the underlying market bid and offer spread which varies throughout the day.

Please contact the dealing desk for further information on an individual equities spread. Also note that market spreads can vary significantly, particularly at the start and end of a trading day.

2. Trading hours

These are the usual hours of business but may vary where daylight saving applies or where there is a market holiday. All times are expressed as London time.

Unless stated trading hours are for Monday to Friday.

3. Overnight finance adjustments

If you hold a position in one of these markets overnight, a finance adjustment is made to your account shortly after the stock market closes.

This is calculated as follows:

f = (s x p x ir) / d

where

f = daily financing adjustment

s = your stake

p = closing price of rolling market as determined by ETX Capital

ir = interest rate, including plus 2.5% for long positions and minus 2.5% for short positions.

d = number of days, i.e. 365 for UK and 360 for all others

Long (buy) rolling bet positions are debited a daily financing adjustment

Short (sell) rolling bet positions are credited a daily financing adjustment

The daily financing fee will be applied to your account each day that you hold an open position (including weekends and holidays).

There may be instances when a daily financing fee is charged to you on short positions, rather than paid to you. This may occur if LIBOR is at an exceptionally low rate.

2. Minimum / Maximum Bet Sizes

Minimum and maximum bet sizes vary from equity to equity, according to the value of the share and its underlying liquidity.

Please see the online product information (the 'i' button on the trading platform) for each individual equity markets min and max size.

Please note, ETX Capital may modify the maximum stake size available for a market in some circumstances, for example, during fast-moving or low liquidity markets.

Further information: Dividends

Any rolling equity position held on account after market close the day before an ex dividend event is adjusted as follows:

	Credit	Debit
UK Shares	90%	90%
USA Shares	85%	100%
Most Euro Shares	85%	100%
Sweden	95%	100%

Please contact dealing desk for a specific European Country and for all other countries not listed.

Short Selling

There may be restrictions or additional costs associated with shorting an equity, especially if the equity becomes difficult to borrow.

There may even be circumstances where we might have to close out your position.