﻿ Equiti | Shares

## What is a share?

Stock markets provide companies with an opportunity to raise money by selling parts of their businesses as shares, these can also be referred to as equities or stocks. Shares are the units of the ownership of a company. If you buy one, you own a part of that company and become a shareholder.

## What Equiti offers

At Equiti we offer a derivative known as a CFD (contract for difference) rather than the underlying share itself. The price of the CFD is derived from the price of the share; the difference is that the holder of the CFD never owns part of the company.

## Benefits of trading a stock CFD

2. The ability to trade using leverage, this enables you to gain more exposure and increase potential profits (also has the potential for increased losses)

## How to calculate your profit or loss

The formulae for working out your P&L for any CFD shares is shown below

Long (buying): Profit or loss = ( Exit price - Entry price ) * Lots traded

Short (Selling): Profit or loss = ( Entry price - Exit price ) * Lots traded

## Example one

You decide to buy 100 CFDs in Coca Cola at \$45.00

The share price rises +10% due to the release of the company’s quarterly earnings being better than forecasted

You sell 100 CFDs in Coca cola at \$49.50

Using the formula above for a ‘long’ trade: Profit or loss = ( Exit price - Entry price ) * Lots traded

The result would be +\$450.  The commission on this trade would have been 0.02% * \$45.00 * 100 = \$0.90  The net profit would therefore be \$449.10

## Example two

You decide to sell 10 CFDs in Amazon at \$1,900 with the opinion that the price of the share will fall

Amazon sales data is released and the report states that they have had an increase in sales, as a result the share price rises +1%

You decide to Close you position at a price of \$1,919

Using the formula above for a ‘short’ trade: Profit or loss = ( Entry price - Exit price ) * Lots traded

The result would be -\$190.  The commission on this trade would have been 0.02% * \$1,900.00 * 10 = \$3.80  The net loss would therefore be -\$193.80

Our charges for carrying a position each night (aka "rolling", "financing") is:

LONG = LIBOR + 2.5%

SHORT = LIBOR -2.5% (minus any 'borrow' costs)

The Financing rates in the table below are shown as an annual percentage (360 day year).

The Dividend is shown as a USD amount that you PAY if you are SHORT.

If you are LONG you will RECEIVE only 70% (since US withholding tax is 30%).

NameFinancing LONG (% per year)Financing SHORT (% per year)Dividend (USD per share)
Alibaba-4.4

-0.6

Alphabet-4.4-0.6
Amazon-4.4-0.6
Apple-4.4-0.6
Berkshire Hathaway-4.4-0.6
Boeing-4.4-0.6
Citigroup-4.4-0.6
Coca cola-4.4-0.6
Disney-4.4-0.6
Ebay-4.4-0.6
Exxon-4.4-0.6
Goldmans-4.4-0.6
JP Morgan-4.4-0.6
Microsoft-4.4-0.6
Netflix-4.4-0.6
Nvidia-4.4-0.6
Starbucks-4.4-0.6
Tesla-4.4

-5.8

Uber-4.4-0.6
Wal-Mart-4.4-0.6

What is short borrowing?

This is the practice of borrowing shares, to then sell them. When borrowing shares there is a cost attached, this will vary dependent on the availability to borrow the underlying share. In most cases there will be no borrowing costs.

Alibaba10%1 Share10.11 / 500.02%Mon - Fri 14:31 - 21:00
Alphabet10%1 Share50.61 / 50 0.02%Mon - Fri 14:31 - 21:00
Amazon10%1 Share47.81 / 50 0.02%Mon - Fri 14:31 - 21:00
Apple5%1 Share9.61 / 50 0.02%Mon - Fri 14:31 - 21:00
Berkshire Hathaway5%1 Share-1 / 50 0.02%Mon - Fri 14:31 - 21:00
Boeing5%1 Share201 / 50 0.02%Mon - Fri 14:31 - 21:00
Citigroup5%1 Share8.71 / 50 0.02%Mon - Fri 14:31 - 21:00
Coca cola5%1 Share-1 / 50 0.02%Mon - Fri 14:31 - 21:00
Disney5%1 Share10.61 / 50 0.02%Mon - Fri 14:31 - 21:00
Ebay10%1 Share8.41 / 50 0.02%Mon - Fri 14:31 - 21:00
Exxon5%1 Share8.61 / 50 0.02%Mon - Fri 14:31 - 21:00
Facebook10%1 Share9.91 / 50 0.02%Mon - Fri 14:31 - 21:00
Goldmans5%1 Share14.51 / 50 0.02%Mon - Fri 14:31 - 21:00
JP Morgan5%1 Share-1 / 50 0.02%Mon - Fri 14:31 - 21:00
Microsoft5%1 Share8.61 / 50 0.02%Mon - Fri 14:31 - 21:00
Netflix10%1 Share16.21 / 50 0.02%Mon - Fri 14:31 - 21:00
Nvidia10%1 Share12.71 / 50 0.02%Mon - Fri 14:31 - 21:00
Starbucks5%1 Share9.11 / 50 0.02%Mon - Fri 14:31 - 21:00
Tesla20%1 Share-1 / 50 0.02%Mon - Fri 14:31 - 21:00
Twitter10%1 Share8.91 / 50 0.02%Mon - Fri 14:31 - 21:00
Uber10%1 Share9.001 / 50 0.02%Mon - Fri 14:31 - 21:00
Wal-Mart5%1 Share-1 / 50 0.02%Mon - Fri 14:31 - 21:00

Commission is charged only on the Open trade.  There is no commission on Closing trades.  The effect is that the commission is ~0.01% per trade.

Your margin will be dependent on the number of shares in the CFD you trade. Please see below for the full tier structure.