Day trading

Day trading is a term used to refer to a trader that opens and closes a position prior to the market closing. For ASX Index CFDs this would mean opening a position after the index has opened for trading and closing it out prior to 4pm (AEST) on the same day for the domestic S&P/ASX 200 index and the following day for all international indices.

By closing out a position prior to 4pm a trader is not obligated to meet ASX Index CFD cashflows including both interest and dividends.

Day trading example

Tom - a 'day trader' who generally opens and closes positions prior to 4pm - believes that the ASX S&P/ASX 200 Index will be strong today.

Tom places an order to buy 10 ASX S&P/ASX 200 CFDs at 6700 = $67,000 value.

Tom pays the Initial Margin of $100 per contract = $1,000.

At 3.00pm ASX S&P/ASX 200 CFDs are trading at 6800.

Tom sells to close 10 ASX S&P/ASX 200 CFDs at 6800 = $68,000 value.

Tom makes a profit of $1,000 or 100% of the initial outlay.

Tom’s initial margin is returned