Contract Value

In contract for difference (CFD) investment, the term contract value is used to denote the value of a CFD position based on the value of its underlying assets.

For example, if a CFD position is based on 1000 shares in a stock which is priced at 100 Swiss francs per share, the contract value of that CFD position is 100,000 francs.

The term may also be used to denote the value of a single CFD, rather than an entire CFD position.

In the case of CFDs based on stocks, the contract value of 1 CFD is equal to the going rate of 1 share in the underlying stock. In the case of CFDs based on commodities, the contract value of 1 CFD is equal to the value of 1 unit of the underlying commodity multiplied by the going price of that unit. In the case of CFDs based on indices, the contract value of 1 CFD is equal to 1 franc (or other denominating currency unit) per 1 index point. In the case of CFDs based on forex pairs, the contract value of 1 CFD is equal to 1 unit of the second currency in the underlying currency pair.

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