Day trading is a term used to refer to a trader that opens and closes a position prior to the market closing. For ASX Gold CFDs this would mean opening a position after 10am (AEST) and closing it out prior to 4pm (AEST) on the same day.
By closing out a position prior to 4pm a trader is not obligated to meet ASX Gold CFD cashflows including both interest and dividends.
Day trading example
Harry is a ‘day trader’ who generally opens and closes positions
prior to 4pm. He believes that the gold price will rally today.
Harry places an order to buy 100 ASX Gold CFDs at 800 = $80,000 value.
Harry pays the Initial Margin of $16.00 per contract = $1,600.
At 3.00pm ASX Gold CFDs are trading at 810.
Harry sells to close 1,000 ASX Gold CFDs at 810 = $81,000 value.
Harry makes a profit of $1,000 or 63% of the initial outlay.
Harry’s initial margin is returned.