The profit in CFD trading at IQ Option is calculated depending on which position you open (buy or sell).
How to calculate profit for long position
If you are intending to buy an asset expecting it will grow in value your position is called Long.
For long positions the profit is calculated according to the formula: closing price / (opening price – 1) x leverage x investment.
For example, Stephen invested 1000 dollars in buying stocks of company A at the opening price of 12 dollars. He applied a leverage of one to five. When Stephen closed the position the stock cost fifteen dollars. Let's calculate his profit from the transaction.
Stephen made a profit of 12 hundred and fifty dollars.
Calculate profit for short position
When you are intending to sell an asset you don't own expecting that it will decrease in value your position is called short.
For a short position, the profit is calculated according to the formula (1 – closing price) / opening price x leverage x investment.
Have a look at the next example. John used 5000 dollars to sell stocks of company A. The price of stocks when the position was opened was thirteen dollars. When John closed the position the price was 11 dollars. John traded with a leverage of one to three.
Following the calculations, John's profit resulted in two thousand two hundred and fifty dollars.
Also read:Â CFDs On IQ Option Made Simpler.
We wish you successful trading.