Cash contracts provide a cost-effective solution for short to medium term trading. The price of a cash contract is derived from the relevant underlying product or a related future and adjusted for fair value. Relevant interest rate levels and time to expiry are the key determinants in the fair value adjustment. They do not have an expiry date. An overnight financing rate is applied for every night that you hold a position open. Because you have only a small percentage of the full value of the trade as margin on deposit, your account incurs a debit or credit for each day that the position is held overnight. Similar to a mortgage on a property, you can put down a deposit and the remaining balance you can pay for with an interest only loan from the bank. In the event of a corporate action or dividend being applied to the underlying market, a cash adjustment may be made to the account to reflect this redistribution of cash.
Futures contracts expire at a future date. The price of a future contract is derived from the relevant underlying cash product or adjusted for cost of carry or derived from the related underlying future. Relevant interest rate levels and time to expiry are the key determinants in the cost of carry calculation. No overnight finance charges are applied to positions held overnight as interest rate considerations are included in the price. A futures contract can be closed at any time before it expires, as can a cash contract.
i) All details are correct at time of going to press.
ii) Capital CFDs reserves the right to alter the contract specifications at anytime and to widen spreads in times of excessive market volatility.
iii) All times stated are Sydney times.
Maximum Computer Generated Stop Level (Max CGSL)
The Max CGSL is the Maximum Computer Generated Stop Level. This is the maximum figure used to automatically allocate a stop loss on newly opened positions. The trading system will assign a stop level based on 80% of the CGSL if there are sufficient funds on the account. For instance, if you have $2000 on your account and you trade 10 Australia 200 contracts , the system will automatically allocate a stop loss of 120 points (because the Max CGSL for the Australia 200 is 150 and 80% of 150 is 120) and you would also have $500 remaining as available funds on your account (the margin held in this case is $150 x 10 = $1500). Alternatively, if there are insufficient funds to cover the Max CGSL, the system will allocate the stop level based upon 80% of the available funds (see following details). The Max CGSL varies depending on the product.
Minimum Initial Margin Requirement (Min IMR)
The Min IMR is the Minimum Initial Margin Requirement. You can calculate the minimum level of funds required to open a new position by multiplying the Min IMR by your trade size. For example, the current Min IMR for the Australia 200 is 25. Therefore, if you wished to trade 5 contracts, you would need a minimum of $125 available funds on your account (25 x 5 = 125). The Min IMR varies depending on the product.
Capital CFDs' Stop Loss Policy
Capital CFDs automatically creates a Stop Order for every trade opened. This Stop is based EITHER on 80% of the CGSL OR on 80% of the available funds on your account. You may amend your Stop to whatever level you desire, assuming you have sufficient unencumbered funds available in the account, and that your required stop is outside the minimum stop order distance allowable for that market. Although this Stop does go some way towards limiting your risk on your open trades you must be aware that all orders including Stops are subject to market gaps unless you specified for your Stop to be guaranteed (see our PDS for more information).
Guaranteed Stop Orders
Capital CFDs offers Guaranteed Stop Orders. With Guaranteed Stop Orders you can trade safe in the knowledge that, should a market gap through your stop level, you will not suffer any extra losses from the slippage and you will be stopped out at the level you requested. As Guaranteed Stop Orders are a form of insurance against market gaps, they come at a small extra cost. Firstly, there's a premium you have to pay for selecting your mandatory Stop to be guaranteed and secondly, it needs to be placed further away from your entry level than if it was a non-guaranteed Stop. When instructing us to attach a Guaranteed Stop Order to an existing open position, an opening trade, or a new order, we will charge a premium by executing a cash debit to your account. Opting for your Stop to be guaranteed will also recalculate the minimum distance away from your opening trade. Further details of the premiums and minimum distances can be found in the Market information tables.
Capital CFDs will not quote any markets outside of market hours.
Limited Risk Accounts
Capital CFDs offer Limited Risk accounts. A Limited Risk account helps minimise the risks of trading by associating a Guaranteed Stop Order with all your opening positions. Depending on your level of experience and financial situation you may be steered towards this account when you apply. Once you have some experience you can always contact Customer Support to request to swap your account to a standard account which means you will have the option of placing Guaranteed Stop Orders if you wish but these will not be mandatory.
As mandatory Guaranteed Stop Orders are essentially a form of insurance against market gaps, they come at a small cost. This premium will be debited from your account when you place a trade. You should also note that by opting for a Limited Risk Account your Stop will need to be placed further away from your entry level than if you selected a standard account where Guaranteed Stop Orders are not mandatory.
Notes on Individual SharesRollover of Futures Contracts
In respect of dividends, an adjustment to your account shall be made with reference to any dividend or distribution attributable to any relevant security on which a trade is based and shall be made and calculated as per our PDS
Rollover terms on all future contracts are available with Capital CFDs. To avail yourself of any rollover concessions you must indicate to Capital CFDs 45 minutes before the expiry of the relevant contract that you wish to roll. Capital CFDs will rollover futures contracts by closing the trade at our mid-point and offer the subsequent future contract at the current Capital CFDs’ quote. Please note that any profits or losses incurred are realised on rollover of futures contracts.
Notes on Cash Contracts
Cash contracts may incur a debit or credit for each day that they are held overnight. If you hold an open position at the day’s session close time then any relevant overnight financing charges will be applied to this position. If you are long of a market, this equates to real market cash exposure and so interest may be charged on this cash value for each day that the position is held open overnight. If you are short of a market, an interest return may be paid on these equivalent cash funds.
The overnight financing can be calculated as follows:
F = ( (p / u) x s x i) / b
F = overnight financing
p = closing price
u = unit risk
s = size
i = applicable interest rate (RFR +2% for long positions or –2% for short positions)
b = day basis (365)
Notes on Equity and Index trades
i)The Relevant Funding Rate (RFR) is generally equivalent to the base rate of the underlying currency of the country of the market concerned.
Long positions on may be debited financing (RFR plus 2%). Short positions may be credited financing (RFR minus 2%). For example, the RFR for a long position in Google would be based upon the base rate (Fed Funds Rate) of the USA plus 2% (e.g. 0.5% + 2% = 2.5%).
ii) The unit risk is the smallest movement on the relevant contract.
iii) Dividend adjustments are credited to long positions and debited from short positions held after the close of the day’s trading session on the business day before the ex-dividend date. Payment adjustments are debited or credited to your account before the ex-dividend date. Dividend adjustments may also apply to index positions.
Notes on Spot currency trades
The Relevant Funding Rate (RFR) for Spot FX trades is generally equivalent to the base rate of the second currency minus the base rate of the first currency in a currency pair.
For example, the first currency in the currency pair GBP/USD is sterling and the second is the US dollar. Therefore, the corresponding RFR for GBP/USD may be calculated as follows:
0.5% (USD) minus 0.75% (GBP) = a negative interest rate of minus 0.25% or – 0.0025.
The difference between the interest rates of currencies may be a negative number which may result in an overnight financing charge for short positions or an overnight financing payment for long positions..
The rates used for the examples above are indicative and are not necessarily representative of correct rates