Frequently Asked Questions

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.

Top

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 +/- 20% from the respective prices for SGX contracts. You can queue up to +/- 30% from current Bid/Ask price for the KLSE contracts. You can queue up to 10 bids from current Bid/Ask price for the HKSE contracts

Example: For a particular share, ABC (SGX counter):
You can sell at 1.000 immediately, and you can buy at 1.010 immediately.
You can also enter queue orders to sell as high as 1.20, or queue to buy as low as 0.80.
If the price becomes 1.20/ 1.21, your 1.20 queue order to sell will be triggered.
If the price does change to 0.79/ 0.80, your 0.80 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.

Top

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.

Top

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), Bursa Malaysia (KLSE), New York Stock Exchange (NYSE) and Nasdaq (NASD). Please refer to our full list of counters offered.

Top

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.

Top

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$3,000 or share collateral deposit is required before you can commence trading.

Top

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.

Top

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

Top

9. What is the minimum contract size?
The minimum contract size would be a board lot size on the underlying shares except for certain blue chips which we offer half lot trading per contract. We do not accept odd lot orders, except in cases whereby the odd lots were the result of bonus issues, stock split or stock consolidation. However, odd lots must be made through CFD dealers at +65 6336 3338.

Top

10. What are the margin requirements for Phillip CFD trading?
The initial margin of S$3,000 must be deposited, in terms of cash, prior to the first CFD trade. Afterwhich, the maintenance margin will be 20% of your portfolio market value marked to the market price daily.

Top

11. Is there any imposed CFD trading limit?
Yes. The current CFD trading limit ceiling for 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 email, 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.

Top

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.

Top

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.

Top

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).

Top

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.

Top

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.

Top

17. How will corporation actions affect my CFD contracts?
Phillip CFD will adjust for corporate actions such as 1) dividends, 2) bonus shares, 3) stock split and 4) stock consolidation.
Dividends will be adjusted on the Ex-Date after day-end. 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.

Example:

5-for-4 bonus shares issued on Share Z (ex-date on 11 Apr 2007)
Before 11 Apr, you bought 40 lots of Share Z @ 1.250 -> Contract Value = 50,000
After 11 Apr, it will be adjusted to 50 lots of Share Z @ 1.000 -> Contract Value = 50,000
Notice the adjustment will not affect the opening contract value.

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

Top

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.).

Top

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.

Top

20. Explain the Auto-renewal process.

On the expiry date, your CFD contract (for example, on STI component stock) would automatically extend for another 30 calendar days.  A one-time commission of 0.2% (commission for STI-component stock) will be levied on the 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.

Example: Short sell initially at $2.00; Last Done Price on the 30th day is $2.28; Bought back finally at $1.90.

Top