Share consolidation and CFDs, how does that work?

[bunchofkeys]

One for the finance brain box of PH, and it may be a simple "it doesn't work like that".

Say for example an AIM company is looking to consolidate the number of shares they have, 10:1, their current share price is something like 0.05p.
Once consolidation has been carried out, their share price is now around 200p.

What happens on the CFD world, if you bought in at 0.05p and then it "shoots" up to 200p?

Is there a gain in your CFD account, or is there something in place to prevent you from making a potential substantial amount?

[williaa68]

All of the CFD contracts will contain an adjustment mechanism. It may simply be to adjust in the same manner as the consolidation - eg 0.5 becomes 5 or may be slightly more complicated.

https://www.ig.com/uk/help-and-support/spread-bett...

[bunchofkeys]

Thank you