in Securities on the JSE

How to get Started with CFD's

You need to registered by filling in the FORM BELOW and submitting your details. Upon approval you will be contacted by our BROKER who will assist you to stage 2 in the process

What risk does the BROKER and OUR company assume on your behalf-CFD?

We do not assume any responsibility on your behalf. Please also read our Disclaimer carefully.

Will I have to pay commission-CFD?

Commission is payable on the opening and closing of a CFD. Typically, the charge for each leg is 0.6% of the Contract Value.

Personal Portfolio Management CFD

We typically offer PERSONAL management of your account on a " Discretionary mandate" and our Performance Commission is split 60/40 after the first 15% as detailed below in our Examples "Going Long and Going Short" Below. This applies on each trade.

What Spread can I expect to see in the bid and offer prices-CFD?

The CFD bid and offer prices are the same to the cash prices of the underlying share, as quoted in the relevant stock market.

Going Long (Example 1) CFD
Share price	R 100.00
Contract	1,000 shares
Contract value	R 100,000.00
Brokerage on purchase (0.6% of R 100 000)	R 600.00
Margin (say 20%)	R 20,000.00
Selling price (say)	R 105.00 per share Selling
value	R 105,000.00
Brokerage on selling (0.6% off 105 000)	R 630.00
Total Profit (R5000.00 - R1230.00 brokerage) GROSS	R 3,770.00
Profit: as % of original contract	3.770%
As % of MARGIN put up	18.85%
60/40 spread over 15% per TRADE-Commission (60% to CLIENT)	18.85-15.00=3.85x40%=1.54%
Nett PROFIT on MARGIN per TRADE to CLIENT	17.31%
Brokerage in and cut as % of original contract	1.23%

Why so Cheap to Deal-CFD?

Investing in CFD's does not buy Shares in the conventional manner, but buys a contract, which avoids incurring the following costs:

• The high JSE charge associated with buying and selling shares;

• Direct and indirect ''strate settlement costs (which are heavily loaded against small investors), and

• Other incidental levies including UST (Uncertified Securities Tax) of 0.25% payable on the purchase leg. (NB. UST is only payable on a CFD if the contract is held for more than three months);

• Brokerage figures are Inclusive of VAT;

Other Costs CFD

The sponsoring broker actually has to buy the share to guarantee the contract, which means that he is effectively lending R80 000 to the client. The current Interest Rate charged is around 8.5% pa (will vary with prevailing Rates) so that the holding cost of R80 000, typically works out at R18.63 per day. Profits (or losses) are geared 10/1 on a 10% margin and 5/1 on a 20% margin.

Longevity CFD

CFD's have no fixed expiry date. They therefore enjoy a huge advantage over warrants and single stock futures. The CFD price is linked directly to the price of the underlying security (as with SSF's) and cannot be manipulated as is sometimes the case with Warrants.

Trading in CFD's

Clients must sign a DISCRETIONARY MANDATE to open a CFD account, and provide details under FICA requirements.

NOTE; Your account is held with ONLINE SECURITIES and any un-invested cash attracts interest at MONEY MARKET rates. A statement of deals and BALANCES can be faxed or emailed to clients on a daily basis. CFD’s are restricted to the top 100 traded stocks on the JSE.

Going Short (Example 2) CFD
Share price	R 100.00
Contract	1000 shares
Contract value	R 100000.00
Brokerage (0.6% of R 100,000.00)	R 600.00
Margin (say 20%)	R20000.00
Selling price (of contract) say	R 95.00 per share
Selling value (of contract)	R 95000.00
Total Profit (R5000.00 - R1170.00 brokerage) GROSS	R 3,830.00
Brokerage (0.6% of R95 000)	R 570.00
Profit: as % of original contract	3.83%
as % of margin put up	19.15%
Brokerage in and out as % of original contract	1.17%
60/40 spread over 15% per TRADE-Commission to PORTFOLIO BROKER	19.15 %-15.00%=4.15% 60 x40 Comm=1.66%(40%)
Addional Cost for SCRIPT Lending FEE	R 550.00

Going short works in exactly the same way as going long, except that:

1.                              Client profits when the share price goes down instead of up;

2.                               There may be a delay of say an hour in accepting a short selling order to allow time to borrow the scrip, and;

3.                                 There is an ADDITIONAL script lending fee R550.00