Transparent pricing model

ROLLING SPOT METALS

CASH INDICES

Cash Commodities

Indices FUTURES

Commoditie FUTURES

Unique Non-Bank ECN liquidity

Under the OXO ECN model (Orders-Crossing-Orders), Equiti acts as the Prime Broker rather than offering a Prime of Prime service. The OXOECN liquidity is an aggregated pool of pricing provided by funded clients of Equiti Capital. These are sophisticated institutions that have the capital and technological means to provide streaming pricing on an anonymous basis.

The benefits of this model are quite significant as it allows Equiti UK Limited and the LPs involved to avoid Prime Brokerage charges and pass on the benefits to end users. Equiti UK Limited enforces strict capital and performance requirements for liquidity providers participating in this pool making sure clients get optimal trade execution.

*All times are stated in GMT

What is a share?

Stock markets provide companies with an opportunity to raise money by selling parts of their businesses as shares, these can also be referred to as equities or stocks. Shares are the units of the ownership of a company. If you buy one, you own a part of that company and become a shareholder.

What Equiti offers

At Equiti we offer a derivative known as a CFD (contract for difference) rather than the underlying share itself. The price of the CFD is derived from the price of the share; the difference is that the holder of the CFD never owns part of the company.

Benefits of trading a stock CFD

1. You’re able to trade long (buy) or short (sell)
2. The ability to trade using leverage, this enables you to gain more exposure and increase potential profits (also has the potential for increased losses)

How to calculate your profit or loss

The formulae for working out your P&L for any CFD shares is shown below

Long (buying): Profit or loss = ( Exit price - Entry price ) * Lots traded

Short (Selling): Profit or loss = ( Entry price - Exit price ) * Lots traded

Example one

You decide to buy 100 CFDs in Coca Cola at $45.00

The share price rises +10% due to the release of the company’s quarterly earnings being better than forecasted

You sell 100 CFDs in Coca cola at $49.50

Using the formula above for a ‘long’ trade: Profit or loss = ( Exit price - Entry price ) * Lots traded

The result would be +$450.  The commission on this trade would have been 0.02% * $45.00 * 100 = $0.90  The net profit would therefore be $449.10

Example two

You decide to sell 10 CFDs in Amazon at $1,900 with the opinion that the price of the share will fall

Amazon sales data is released and the report states that they have had an increase in sales, as a result the share price rises +1%

You decide to Close you position at a price of $1,919

Using the formula above for a ‘short’ trade: Profit or loss = ( Entry price - Exit price ) * Lots traded

The result would be -$190.  The commission on this trade would have been 0.02% * $1,900.00 * 10 = $3.80  The net loss would therefore be -$193.80

Our charges for carrying a position each night (aka "rolling", "financing") is:

LONG = LIBOR + 2.5%

SHORT = LIBOR -2.5% (minus any 'borrow' costs)

The Financing rates in the table below are shown as an annual percentage (360 day year).

The Dividend is shown as a USD amount that you PAY if you are SHORT.

If you are LONG you will RECEIVE only 70% (since US withholding tax is 30%).

What is short borrowing?

This is the practice of borrowing shares, to then sell them. When borrowing shares there is a cost attached, this will vary dependent on the availability to borrow the underlying share. In most cases there will be no borrowing costs.

Commission is charged only on the Open trade.  There is no commission on Closing trades.  The effect is that the commission is ~0.01% per trade.

Here is this week’s Upcoming estimated Dividends commencing

How are dividends dealt with for indices?

Dividends are cash issued payments based on a company’s earnings, for indices a dividend would be produced if a company within the index issued a dividend. The volume and timing are decided by the board of directors. Dividends can also be issued as shares if the underlying share is owned.

Depending if you were long or short it will impact your position different. The change in price for a long position would be disadvantageous due to the fall in price therefore an account credit would be applied. However, the inverse position would mean an account debit to cater for the benefit of the price drop. Therefore, you wouldn’t lose or gain from the dividend.

Let's say you hold a long position of 4,000 Lots of UK100ROLL and there is a dividend of 12p. This would mean £480 would be credited to your account.

12p x 4,000 = £480

Note: If you held a short position going into the ex-dividend date then your account would be debited £480.

WITHHOLDING TAX

Any adjustments made to a long position due to a dividend will be less applicable withholding taxes – a tax deducted from dividends in the underlying market. This levy is based on the underlying; usually around 15%.

* We reserve the right to change any of the information contained herein at any time, in case of error. Equiti shall not be responsible for any loss, either directly or indirectly, arising from any action of any kind taken and that is based on the information contained herein.