Key points at a glance
- A CFD uses margin; you pay the purchase price of each of the two securities in full.
- A knock-out barrier can end a turbo before a later share-price recovery.
- The ordinary call warrant in this example has no barrier, but does have time value and expiry.
- Financing, spread and settlement rules need checking separately for each product.
One share at €100. Three separate €500 examples.
Share CFD
€500 margin
- Position
- 25 share equivalents
- Reference value
- €2,500
- Share at €110
- +€250 before costs
- What ends the position?
- Closing or insufficient account cover
Long turbo
€500 purchase
- Position
- 500 securities at €1
- Strike / barrier
- €90 / €90
- Share at €110
- Model value €1,000
- What ends the product?
- Barrier, maturity or termination under its terms
Call warrant
€500 purchase
- Position
- 500 securities at €1
- Strike / ratio
- €100 / 0.1
- Share at €110
- No single price before expiry
- What ends the product?
- Fixed term; no barrier in this example
What does €500 actually open in each case?
Our single share initially trades at €100. We compare three alternatives, each with a €500 starting amount. These are chosen teaching assumptions, not three available offers. Using the whole amount only makes the constructions easy to compare; it is not a position-size instruction.
For the long share CFD, assume 25 share equivalents. The reference position is therefore €2,500 of share value. At an assumed 20% initial margin, €500 collateral is tied up. You have bought neither 25 shares nor a security.
For the long knock-out, choose a simplified turbo with a €90 financing level and €90 barrier, and a 0.1 ratio. Without premium or charges, its model price is (€100 − €90) × 0.1 = €1. A €500 purchase gets 500 securities.
The ordinary call warrant has a €100 strike, 0.1 ratio and fixed remaining life. Assume its purchase price is €1 too, so €500 buys 500 warrants. Unlike the turbo, its assumed price at the strike is entirely time value in this example.
What changes at €110 or €95 for the share?
First look at moves before the warrant expires. For the turbo, assume its financing level stays fixed and the barrier has not been touched earlier. Assume the CFD remains open. This isolates pricing mechanics before charges or closure events.
At €110, the CFD gains €10 × 25 = €250, leaving €750 account equity. The 500 turbo units have a simplified model value of €1,000. The warrant’s pre-expiry selling price cannot, however, be derived from the share price alone.
At €95, the CFD loses €5 × 25 = €125, leaving €375 equity. The 500 turbo units have a model value of €250. The call warrant has no intrinsic value, but may still have time value. Its amount depends, among other things, on time remaining and implied volatility.
| Scenario before expiry | Share CFD | Turbo without prior barrier touch | Call warrant |
|---|---|---|---|
| Share €100 | €500 account equity; €500 initial margin | 500 units × €1 = €500 | 500 units × €1 = €500 |
| Share €110 | +€250 price result; €750 equity | €2 model price; €1,000 value | €1 intrinsic value per unit; full executable price cannot be inferred from that alone |
| Share €95 | −€125 price result; €375 equity | €0.50 model price; €250 value | €0 intrinsic value; remaining time value unknown |
Scroll the table sideways to read every column.
CFD account equity and the value of a security are different measures. Turbo figures are model values, not executable quotes. No call-warrant selling price is invented.
The product structure sets the remaining rules
Some knock-out products are legally called turbo warrants. Here, “warrant” means an ordinary call without a barrier. An exchange-traded option contract is not one of the three products.
| Feature | Share CFD | Long turbo | Ordinary call warrant |
|---|---|---|---|
| Legal structure | Over-the-counter contract for difference with a CFD provider | Security with a claim on an issuer | Security with a claim on an issuer |
| Price drivers | Share reference, contract size and adjustments | Gap to financing level; premium, financing and barrier risk | Share price, strike, time, volatility, interest and expected dividends |
| Leverage | Position value relative to margin | Small security price relative to share exposure | Option sensitivity and small security price; not constant |
| Financing | Cash CFDs often have ongoing adjustments | Often reflected in an adjusted financing level for open-end turbos; other types vary | Interest is part of pricing; not ordinary CFD overnight financing |
| Barrier | No product knock-out barrier; margin closure possible | Yes: €90 in this example | None for the ordinary call in this example |
| Expiry | Cash CFDs often open-ended; other types have expiry | Fixed-term or open-ended; knock-out and issuer termination possible | Fixed term; settlement under issuer terms |
| Spread | Difference between buy and sell quotes; other fees may apply | Buy and sell quotes of the security | Buy and sell quotes of the security |
| Counterparty question | Provider, account rules and execution | Issuer’s ability to pay | Issuer’s ability to pay |
Scroll the table sideways to read every column.
The route to the final price also matters
Suppose the share touches €90 before climbing to €110. The example turbo has already hit its barrier and ends under its knock-out rules. The later recovery does not revive it. Any residual payment depends on the product type and terms.
A CFD may also have been closed earlier, but for a different reason: insufficient account equity. German retail CFD rules include margin close-out and negative-balance protection at CFD account level. They do not prevent a loss of account capital. Initial margin is therefore not an unchanging loss limit for a position. Regulatory position checked on 9 October 2026.
Simply touching €90 does not end the ordinary call. Its fixed expiry still matters: a recovery after that date could be too late. One closing share price is not enough to compare the three alternatives.
At expiry, a payout is not necessarily a profit
If our ordinary call is settled at a reference share price of €110 and its terms specify simple cash settlement, (€110 − €100) × 0.1 = €1 per warrant. For 500 units the payout is €500: exactly the purchase amount in this simplified case. Fees would reduce the result.
At a reference price of €100 or €95, this ordinary call would pay zero. Time value that may have existed earlier is not paid on top at expiry. The product terms specify valuation time, last dealing and payment date.
The useful comparison is: which movement does each product reflect, and what can end it? Use a consistent currency and time horizon, but calculate margin, barrier and time value according to each product’s own rules.
Further detail: Equal budgets do not give equal exposure
The CFD represents 25 share equivalents. In the simple model, 500 turbo units with a 0.1 ratio respond to 50 share equivalents. The 500 call warrants have an additional, variable option sensitivity. The same starting cash therefore creates neither equal delta exposure nor equal loss probability.
A fuller comparison needs current executable quotes, a time horizon, financing, exact contract size and the same share-price path. Financing levels and barriers may change for an open-end turbo; CFD equity and closure rules matter; time and volatility matter for a call. Add each product’s excluded charges separately.
What to learn next
- Share CFD or options CFD?
Look more closely at the price a contract for difference references.
- Why a call can fall as the share rises
Follow time value and volatility through one example.
Glossary
- Margin
- Collateral tied to the CFD, not the purchase price of a security.
- Knock-out barrier
- The threshold that ends a turbo under its terms when reached.
- Time value
- The ordinary warrant’s price component above intrinsic value.
- Issuer
- The entity issuing the knock-out or warrant and owing its contractual payment.
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