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CFD and leverage reporting

General questions about using Fund Manager that do not fit into any other forum.

Postby realbg » Tue Dec 21, 2010 7:54 pm

Hello,

I started trading CFD (Contract for Diffrence) and I wonder what is the best way to enter these trades in the software. I also would like to know what reporting tools you provide to monitor leverage positions. I want to see gross and net delta of my portfolio.

Thank you for your help.
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Postby Mark » Tue Dec 21, 2010 9:46 pm

Hi realbg,

I'm not familiar with how CFD's work, so don't have any specific advice. What sort of tools are you looking for relating to leverage positions? Fund Manager does not have anything specific for this. In Fund Manager all investments have a value equal to the share price times the number of shares owned. You can control both the share price and the shares owned.
Thanks,
Mark
Fund Manager - Portfolio Management Software
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Postby realbg » Fri Dec 24, 2010 10:24 pm

Mark,

This is how the typical CFDs work.

If I buy 1,000 shares of Stock A at $10/share, I pay the broker $1,000 (instead of $10,000). The next day, if my stock value drops to $9, then I need to pay the broker $900 more. When I sell, if the stock price is $11, then the broker credits my account $1,000.

So, my investment return need to be adjusted for the extra margin that I deposit with the broker in case the stock price drops.

I also want the ability to monitor gross and net exposure (gross is $10,000 and net is $1,000; initially).

Is it possible to do this with Fund Manager software?

Thanks.
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Postby Mark » Sun Dec 26, 2010 10:22 am

Hi realbg,

Thanks for the explanation. There is no built in feature that will support this type of investment. Every investment in Fund Manager has a value equal to the shares times the price (no leverage). We may consider adding support for this in a future version.
Thanks,
Mark
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Postby fundman247 » Sat Jan 08, 2011 2:37 am

Hi Realbg,
The best way that I can think of and using for CFD's in FM is to have a cash account in which you pay the extra margin in (buy) and out (sell) if you withdraw. This account could also be used to pay/receive interest and any other costs.
The cash account could be in a separate sub-portfolio.
The actual shares you have (long and short) are updated in the actual daily price and the profit/loss would be shown. Dividents can be added as per usual. If you have a % cost or fee cost for each trade it can also be done as per usual in each investment.
This works very well and the only drawback is profits on shorts are shown but the return on investment cannot be calculated by FM.

Have been using FM for 3 years with CFD's and futures.

Please reply via the forum and may be we can talk about it if more info is needed.

Hope this helps.
Don't stay in bed....unless you can make money in bed - George Burns
However beautiful the strategy, you should occcasionally look at the results - Winston Churchill

Remeber and practise it!!!!!!
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Postby Djobydjoba » Sun Jan 29, 2012 11:43 am

Hi Mark,

I trade CFDs too. I'm not an expert myself, and couldn't explain you the ins and outs of CFDs, nor the functionalities I expect from Fund Manager on this (and my approximative english doesn't help). I still haven't got a plan to enter them in FM.

As they become more and more popular, perhaps could you consider adding support for them ?

Thanks.
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Postby Mark » Sun Jan 29, 2012 12:02 pm

Hi Djobydjoba,

Thanks for the feedback. We can keep this in mind when considering features for future versions.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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