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What is Amalgamation

Amalgamation is way of calculating commission charges. When you place multiple trades per day, Phillip CFD will amalgamate all contracts and a collective commission is charged against the total value of the day’s transactions, instead of separate commissions for each transaction carried out. This saves the client commission fees if the value of each individual commission per transaction falls below the minimum commission. Phillip CFD amalgamate buy and sell contracts of the same counter traded on the same day only.

Amalgamation Illustration
Jasvind bought (Long) 3,000 contracts of Stock A at $2.00 at 10:00 am. At 2:00pm, the price of Stock A had moved to Jasvind’s Target Profit of $2.10 and he decided to close his contracts. If the commission for that contract is 0.128% with a minimum of $25, the total commission charged to him is

Commission = [(3,000 * $2.00) + (3,000 * $2.10)] * 0.128% = $15.74
GST = $15.74 * 7% = $1.10
Total = $15.74 + $1.10 = $16.84

Since Jasvind’s total commission for Opening and Closing the contracts on the same day for the same contract is lower than the minimum commission of $25, the commission charged to him will be $25 ($26.75 including GST).

However, if Jasvind bought 10,000 contracts instead of 3,000, the total commission charged to him is,

Commission = [(10,000 * $2.00) + (10,000 * $2.10)] * 0.128% = $52.48
GST = $52.48 * 7% = $3.67
Total = $52.48 + $3.67 = $56.15

In this situation, since Jasvind’s total commission for Opening and Closing the contracts on the same day for the same contract is higher than the minimum commission of $25, the commission charged to him will be $52.48 ($56.15 including GST).

What is Commission

Commission is the percentage of the contract value paid to the broker every time a transaction is carried out. It differs for each contract and while minimum commission charges still apply.

Commission Illustration
Jasvind bought (Long) 3,000 contracts of Stock A at $2.00. If the commission for that contract is 0.128%,

Opening Commission = 3,000 * $2.00 * 0.128% = $7.68 (Since minimum commission for is $25, Jasvind pays $25)
GST = $25.00 * 7% = $1.75
Total = $25.00 + $1.75 = $26.75 

4 days later, Jasvind sold the contracts at $2.10.

Closing Commission = 3,000 * $2.10 * 0.128% = $8.06 (Since minimum commission for is $25, Jasvind pays $25)
GST = $25.00 * 7% = $1.75
Total = $25.00 + $1.75 = $26.75 

Total Commission to Open and Close the contracts = $26.75 + $26.75 = $53.50

What is Finance Charge

The charge for the cost of borrowing from the brokerage to finance a purchase; ranges from 3% to 8% per annum. Phillip CFD charges finance charges on 100% of the marked-to-market contract value based on number of overnight calendar days that the contract is being held.

Finance Charge Illustration
Jasvind bought (Long) 3,000 contracts of Stock A at $2.00 at 10:00 am. At 2:00pm, the price of Stock A had moved to Jasvind’s Target Profit of $2.10 and he decided to close his contracts. If the commission for that contract is 0.128% with a minimum of $25, the total finance charge charged to him is 0 (Zero).

There is no finance charge if you liquidate the position within the same day.

Finance Charge Illustration
Jasvind bought (Long) 3,000 contracts of Stock A at $2.00. 4 days later, the price of Stock A went up to $2.10 and Jasvind decided to sell the 3,000 contracts. Assuming the long finance charge for Stock A is 2.5% p.a. The table below shows the closing price for Stock A for the first 3 Days

Stock A Finance Charge
Day 1 Closing Price : $2.01 = 2.01 * 3,000 contracts * 2.5% *1/365 days
= $0.41
Day 2 Closing Price : $2.04 = 2.04 * 3,000 contracts * 2.5% *1/365 days
= $0.42
Day 3 Closing Price : $2.07 = 2.07 * 3,000 contracts * 2.5% *1/365 days
= $0.43
Contracts Closed on Day 4 at $2.10 No Finance Charge Charged on Closing Day!

Total Finance Charge Charged to Jasvind is $0.41 + $0.42 + $0.43 = $1.26