Bid price examples Back to list

Member SinceMar 07, 2022

Posts 263

Agaricy96

Oct 20, 2022 a 09:51
Assume the price of Apple stock is $130.50, with an offer price of $130.60 and a bid price of $130.40. You believe the price will fall, so you open a CFD to short - or sell - five contracts at $130.40. After a few days, the share price has dropped to $127.40, with a bid of $127.20 and an offer of $127.60.

In this case, your decision to go short resulted in a profit, and you could close your position. To accomplish this, reverse your trade and purchase five contracts at the current offer price of $127.60.

Consider the EUR/USD pair, which is currently trading at $1.2450, with an offer price of $1.2480 and a bid price of $1.2420. Given the Federal Reserve's recent interest rate announcement, you decide to short this pair on the assumption that its value will fall.

As a result, you decide to open a CFD position at $1.2420 to sell five contracts. After a few days, the EUR/USD has dropped to $1.2220, with a bid of $1.2190 and an offer of $1.2250. You decide to take your profit by reversing your trade and buying five EUR/USD contracts at $1.2250 to close your position.

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