Stocks
Example #1. Buy Endesa shares with stocks (long position)
Opening position
On April 1st, Endesa is trading at 13.99 (bid) / 14.00 (ask) Euros. You decide to buy 2,000 shares at 14.00 € on that day. Your purchase amounts to 28,000 Euros (14.00 € x 2,000 shares).
Dividend calculation
Imagine that on April 17th, Endesa pays a dividend per share of 0.6 €. As a consequence, you receive 1,200 Euros (0.6 € x 2,000 shares).
Closing position
On May 1st, Endesa is trading at 15.30 (bid) / 15.31 (ask) Euros and you decide to close your position. Therefore, you sell 2,000 shares at 15.30€ and obtaining corresponding profit.
Trade summary
Example #2. Buy ETFs with Stocks (long position; Oil)
Opening position
On May 3rd of 2009, the shares of the "Power Shares DB Oil Fund" ETF are trading at 21.5 (bid) / 22.5 (ask) USD per share. These shares are listed in the New York Stock Exchange-ARCA. The ETF tracks the Spot price of crude oil in USD. The spot price of one barrel of crude oil is at 50 USD per barrel.
An investor decides to open a long position on crude oil, since he/she expects a rise in price. For this reason, he/she decides to buy 2,100 shares of the "Power Shares DB Oil Fund" ETF, making a total investment of 47,250 USD (2,100 shares x 22.5 USD per share).
Closing position
Imagine that on September 18th of 2009, the spot price of a barrel of crude oil is trading at 40 USD and the "Power Shares DB Oil Fund" ETF is trading at 17.2 (bid) / 18.2 (ask) USD per share. Note that since the ETF tracks exactly the underlying asset, its price fell 20%. Since the investor does not want to incur in additional losses, he/she decides to sell his 2,100 shares for a total value of 36.120 USD (2,100 shares x 17.2 USD per share).
Trade summary
