1. How does Phillip CFD work?
Phillip CFD is an agreement between two parties to settle the difference between the opening and closing price of the contract multiplied by the number of shares specified.

2. How does Phillip CFD quote its prices?
All Bid (buyer) and Ask (seller) prices are quoted at current stock market prices, without any additional spreads. You buy CFD at the current market Ask price and sell CFD at the current market Bid price.

You can key in a CFD order to queue up to 6 bids from the respective prices.

Example: For a particular share, Chartered Semiconductor:
You can sell at 1.030 immediately, and you can buy at 1.040 immediately.
You can also enter queue orders to sell as high as 1.090, or queue to buy as low as 0.99.
If the price becomes 1.09/ 1.10, your 1.09 queue order to sell will be triggered.
If the price does change to 0.985/ 0.99, your 0.99 queue order to buy will be triggered.

Note that all CFD orders when triggered and released into the system will either be totally matched, rejected or partially done. (Note: You can queue up to +/- 30% from current Bid/Ask price for the KLSE contracts)

3. How is the contract value of CFD calculated?
It is the number of underlying shares in the contract multiplied by the price of the underlying security.

4. What are the counters available for trading under Phillip CFD?
Phillip CFD offers counters listed in the Singapore Stock Exchange (SGX), Hong Kong Stock Exchange (HKSE) and Bursa Malaysia (KLSE). Please refer to our Phillip CFD Counter List for the counters offered.

If you did notice some counters are termed as "Long-Only". Investors can only initiate "Buy" contracts on these counters.

5. Do I need a Central Depository (Pte) Ltd account or linkage to trade Phillip CFD?
No, you do not need a Central Depository (Pte) Ltd account or linkage to trade Phillip CFD.

6. How long does it take to open a Phillip CFD account?
For existing Phillip Securities clients, the CFD trading facilities will be opened within two working days. For new clients, account opening will take around 5 working days. A minimum cash of S$1,000 or share collateral deposit is required before you can commence trading.

7. How do I know if my CFD application is approved?
Your Trading Representatives will be informed when your Phillip CFD account is activated. In addition, the CFD trading page will be granted full access as compared to the partial access before activation.

8. Is there any maintenance fee for the Phillip CFD account?
There are no maintenance fee or administrative fee for the Phillip CFD account.

10. What are the margin requirements for Phillip CFD trading?
The initial margin of S$1,000 must be deposited, in terms of cash or equivalent shares collateral, prior to the first CFD trade. Afterwhich, the maintenance margin will be 20% of your portfolio market value marked to the market price daily.

11. Is there any imposed CFD trading limit?
Yes. The current CFD trading limit ceilingfor all clients is set at S$200,000 subjected to your equity x 5 in the CFD account, whichever is lower. If you have deposited more than S$40,000 (meaning you should have trading balance of more than S$200,000), you would have hit the trading limit ceiling. Thus you would need to send in a credit revision request, through your trading representative or our POEMS Dealing Team for an increase in your trading limit. A credit revision approval would depend on the management's decision.

12. How do I execute my CFD trades?
Once you have opened your CFD account and deposited your initial margin, you can trade via the POEMS On-line platform or over the phone via your trading representative.

13. In what order are the trades being squared off?
Phillip CFD trades are being squared off in a First-in-First-out (FIFO) basis.

The opposite contracts will always close out the first contract that was done on that counter.

14. Is CFD traded on the stock exchanges?
No. CFD is an over-the-counter (OTC) product, and therefore it is not traded in any of the exchanges (SGX-ST or other foreign exchanges).

15. Can my CFD trades be partially filled/closed?
Phillip CFD orders may be fully done, part done or rejected. The usual reasons are insufficient funds, credit/ trading limit exceeded, etc. You can consult your Trading Representatives for clarification.

16. How do I access my account information?
Your CFD account information is readily available to you and your Trading Representative via the POEMS On-line platform (CFD Acct Mgmt page). Contract notes will be sent on the trading day after each CFD transaction. The contract notes will be sent either by email or postage mail (depend on whether you opt in to the email contract notes). In addition, you will receive monthly and semi-annual statements on their Phillip CFD account.

17. How will corporation actions affect my CFD contracts?
Phillip CFD will adjust for corporate actions such as 1) dividend, 2) bonus shares, 3) stock split and 4) stock consolidation.
Dividend will be adjusted one trading day after pay-date. Clients, who bought a CFD contract, will receive the after-tax net dividend. Clients, who sold a CFD contract, will have to pay the before-tax gross dividend.
Bonus shares, stock split and stock consolidation will be adjusted on the ex-dividend date. CFD positions will be adjusted to reflect the theoretical new price and quantity.

For corporate actions not mentioned above, Phillip Securities Pte Ltd reserves the rights to liquidate outstanding positions before the ex-dividend date.

18. When I buy CFD contract, do I have the ownership to the underlying stock?
No. Trading CFDs does not give investors the ownership to the underlying stock. Therefore, CFD holders does not have the voting rights and are not entitled to some corporate actions (e.g. warrants rights, rights issues, etc.).

19. Can I trade less than 30 calendar days using Phillip CFD?
Yes. CFD contract holders can close out their contract any time within the 30 days. Likewise, you have the option to extend the contract beyond the 30 days limit through an auto-renewal process.

20. Explain the Auto-renewal process.
On the expiry day, your CFD would automatically extend for another 30 calendar days. A one-time commission of 0.6% will be levied on every new leg, based on the 30th day' Last Done Price. All profit/loss and finance charges for the first 30 days will be realized upon contract renewal.

21. Can I trade using CFD without the 5-times leverage facilities?
Yes. The 5-times leverage is only offered as a built-in feature. If you have deposited $10,000 into your CFD account, you have the freedom to trade up to a maximum of $50,000.

22. What is the margin requirement in CFD trading?
At all time, you should keep a maintenace margin in their Phillip CFD account. The amount will be equal to 20% market value of your portfolio positions, and market portfolio value is marked-to-market using the day's Last Done Price.

23. Explain the Mark-to-Market practice.
It is the adjustment of the book value or collateral value of the underlying security to reflect the current market value. Profits or losses are then credited /debited into/from the client's account.

24. Under what circumstances will I receive a margin call?
The Equity Balance should be more than or equal to the maintenance margin which is 20% of the Market Value of your CFD portfolio.

Any shortfall will trigger a margin call, and client would have up to 3 business days from the date of notice to top up the margin deficit. It will be a force-selling call if Equity Balance drops below 5% of the Portfolio Market Value. Client must make good the shortfall on the same day before 3 pm.

25. When will I receive a margin call?
When Equity Balance < 20% Portfolio Market Value, investor will receive a reminder call by your Trading Representatives on the first day and a final call on the third day.

When Equity Balance < 5% Portfolio Market Value, investor will receive a final call by your Trading Representatives in the morning, and only has up to 3pm that same day to fulfill the margin deficit.

PSPL shall have the absolute discretion and without further notice to you, liquidate the CFD account, including shares deposited as collateral, to bring the margin percentage to not less than 20% if the margin requirement is not met within the stipulated time frame.

26. How can I fulfill my margin call?
You can pledge either cash or shares collateral.

Cash payment can be made at the Head Officer's cashier counter.

EPS (Electronic Payment of Shares) Please choose 'lump sum' payment and initiate payments before 9pm to ensure that your CFD ledger is credited punctually before the next market day. Kindly inform your trading representative that the EPS is meant for your CFD trading account.

Cheque should be crossed and made payable to 'Phillip Securities Pte Ltd'. Please state your trading account number, name and contact number on the back of the cheque, and indicate that this payment is meant for CFD.

Shares Collateral Only shares that are graded 'A' or 'B' are accepted as collateral for CFD trades. For full list of marginable shares, kindly refer to Phillip Margin List. Client need to open Single Account. (Margin Account with CFD facility)

27. How can I deposit shares collateral into my Phillip CFD account?
Clients whom want to pledge shares as collateral for CFD trades must open a Single Account (Margin Account with CFD facility) with Phillip Securities. All inward transfer fees or administrative fees will be charged according to account types. Outward transfer fees and administrative fees vary according to the account types. Feel free to contact your trading representative if you have any queries.

28. What sort of collateral will I be able to deposit as margin?
You can deposit all SGX-listed Grade A and B shares as a collateral for CFD trading. The grading of the shares will follow the margin list of Share Margin Financing Account. You may visit http://www.poems.com.sg/ for more information on the shares which Margin Account accepts.

Example: Client pledge 3 types of shares. Client can trade CFD positions up to 5 times of the available cash. There is no financing for C shares.

Note: Please refer to Pledge Your Shares for more information.

29. What are the charges associated with the CFD trading?
There are commission, finance charges, interest deficit or excess applied in Phillip CFD trading. Please refer to the Phillip CFD Commission document for full details.

30. How will my trade be credited and debited?
Funds will be debited real-time for all new CFD positions, and credited real-time when the positions is liquidated. Commission, accrued finance charges and unrealized profit or loss will be credited and debited at the end of the day. Interest will be debited or credited at month end.

31. Will I receive contract notes and trade confirmations for my Phillip CFD trades?
Yes. A contract note will be sent to you the next business day after a trade has been initiated. In addition, you will also receive a monthly statement reflecting all CFD transactions and fees charged to your CFD account.

32. Can I withdraw cash from my CFD account?
You may withdraw any excess cash from your cash ledger, provided the maintenance margin of 20% has been satisfied. You may also draw overdrafts from the shares collateral that you parked in your Single Account.

33. How will my Phillip CFD contracts denominated in foreign currency be settled?
Please refer to the <BEFORE YOU TRADE> page for the respective settlement currency pertaining to the SGX, HKSE and KLSE markets.

Clients who are interested in trading USD-traded CFD would have a few things to note.
Phillip CFD whose underlying share is traded in a foreign currency would be settled in that particular foreign currency.
Clients trading in foreign currency CFD counters would have to maintain multiple currency ledgers in their CFD account.
All charges are the same for the CFDs denominated in the various currencies, EXCEPT for the penalty charge on margin deficit.

34. Would there be auto-conversion and transfer between the different ledgers?
No, there will not be any auto conversion or fund transfer. Clients can however submit their currency conversion or fund transfer request via the online forms or through their trading representatives. Currency conversion is done based on the end-of-day rate.

35. What are the trading strategies available with CFD?
Given that CFD is a leverage product, as well as the ability to short sell, you are open to a host of other trading strategies.

Long
The simplest and most straightforward strategy is to "go Long" (buy CFDs). A long position in CFD will profit from an upward price movement in the underlying share.

Short
CFD allows you to sell the shares that you do not have and buy it back at a later date with no time constraint. This would allow you to ride on the bear market.

Pairs Trading
This involves short selling and simultaneously buying CFD of another underlying shares (usually in the same sector) to set up a performance trade. Conducted in the correct ratio, this leaves the investor market neutral whilst having an exposure to the relative strength of both buying and short selling stock.

Hedging (Risk Management Tool)
Taking a position in CFD opposite to a position held in the cash market to minimize the risk of financial losses from an adverse price change; a purchase or sale of CFD as a temporary substitute for a cash transaction that will occur later.

36. What are the differences between Ready market Contra-trades and CFD?
Contra trades are subjected to the T+3 business days settlement. In other words, doing a contra on a particular share would mean that you are expose to buying-in possibilities. CFD, on the other hand, allows you to hold a short (sell) or long (buy) position for as long as up to 30 calendar days, with a possibility of a roll over thereafter.

37. What are the differences between short selling via Securities Borrowing & Lending (SBL) and via CFD?
Using Phillip CFD, you do not need to borrow shares unlike SBL. This advantage reduces the administrative hassles and, more importantly, save time. In other words, you will not miss out the opportunity to long/short your counter at your desired price.