1. Commissions & financing

2. Market data

Trading at current market price provided by Warsaw Stock Exchange requires subscribing real time market data.

XTB-Trader 4 offers best bid and offer price (level 1) for equities listed in WIG 20 index. Subscribing real time market data is free of charge for individuals, all the details are published in the Client Office on XTB webpage.

3. Corporate actions

Cash dividends

Cash dividends on Equity CFDs are paid according to the underlying equity, although you are not the beneficial owner of the shares. Long positions will be credited with net dividend and short positions will be charged with gross dividend.

Let’s assume that XYZ company announces a dividend payment of PLN 2 per share and the tax rate equals 19%. Investor A holds a long position and Investor B holds a short positions of 100 XYZ CFDs on the ex-dividend date.

On the ex-date each client holding a long position in relevant Equity CFD will be credited with net dividend (after-tax dividend) and each Client holding a short position will be debited with gross dividend. Dividends are calculated basing on the number of Equity CFDs (equivalent to number of underlying instruments ) held in the account.

Rights issues

In case of right issues, long positions will be credited with cash equivalent to the rights issued and short positions will be debited with cash equivalent.

Stock dividends, spinoffs, bonus issues

In case of stock dividend, spinoffs and bonus issues, long positions will be credited with additional CFDs and short positions will be debited with equivalent of CFDs.
When CFD is not available, long positions will be credited and short positions will be debited with cash equivalent to the rights issued
Stock splits and reverse stock splits

Splits and reverse stock splits will be replicated on CFD positions. Price and number of contracts will be adjusted on the ex-date according to undertaken corporate actions.

Mergers

In case of mergers, long positions will be credited with new CFDs and short positions will be debited with equivalent of new CFDs.
When CFD is not available, long positions will be credited and short positions will be debited with cash equivalent to the merger.
Voting rights and tender offers.

Owning the CFDs is not equivalent to being the beneficial owner of cash equities. Therefore it does not include the right to participate in elections and offers.

4. Tax

CFDs are liable to capital gains tax. This includes any gains made on trading as well as gains from dividend and financing payments. As with cash equities gains can be offset against losses. Investors are solely responsible for reporting tax to domestic authorities.

5. Partial Fills

The outcome of order execution depends on the current market depth. An order may be executed partially at different price levels. The part of an order which has not been executed remains in the exchange order book until final execution, cancellation or expiry. The final execution price is calculated as the volume weighted average price (VWAP) of all partial fills.

6. Risk management

In order to manage your portfolio successfully, it is crucial to become familiar with the trading account details. Thanks to having a good understanding of how particular positions are calculated, you will be able to control risk of open trades.

Balance

•   Balance is defined as money deposited on a trading account
•   It includes only realized profits and losses

Equity

•   Equity is calculated as trade account balance plus or minus any unrealized profits or losses from open positions and minus financing costs
•   Unrealized profit and loss includes financing costs of holding position maintained overnight

Profit

•   Total profit is defined as a sum of unrealized profits and losses from all open positions
•    Profit includes financing costs of open trades held overnight (Swap)

Margin

•   Margin equals to the initial deposit required to open a position. It is calculated as contract value multiplied by margin level
•   For buy limit and buy stop orders margin required to place order is blocked on account as an open position (value in the size column equals margin value)

Free margin

•  Free margin is calculated as equity minus margin required to open positions on a trading account
•  In other words free margin equals the free equity that can be used to pay initial deposit in order to open new positions

Margin level

•   Margin level is defined as equity divided by margin
•   This is the crucial factor for managing risk of open positions
•   The minimum margin level, which allows to maintain open trades is 30%
•   When margin level on a trading account drops below 30%, the trade generating the highest loss will be closed at the current market price