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How to work out value of contract per point of movement.


Guest danatherton97

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Guest danatherton97

I'm learning the IG Academy courses at the moment and got to the CFDs section.

It states: "Going back to silver, it's traded in a contract size of 5000 troy ounces in the underlying market. Therefore most CFD providers also offer silver in a contract size of 5000 troy ounces. This works out to be the equivalent of $50 per point of movement."

My question is, why does this work out to be the equivalent of $50 per point of movement? I feel like I'm missing something here because I just cant wrap my head around it at all. Your profit or loss on a CFD is calculated as the numbers of contracts traded multiplied by the value of the contract per point of movement multiplied by the difference in points between the opening and closing of the contract. So, how do you work out the value of the contract per point of movement? Any help or explanation would be appreciated.

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