CFD Trading Now

Auto trading software does not require any form of supervision. The advantage of this is that is that it leaves you with free time to perform other tasks.

Why you should use the Auto trading software:

Most programs are user-friendly – Installing auto trading software is both easy to use and install. You do not have to worry even if you have never traded before or used the auto trading software turbo. This is because it comes with an easy to understand instruction manual as well as a video tutorial. Upon purchasing auto software, you will be given a demo account. This is especially important and helpful to you if you are unaware of how the software works.

It is safe – Automated software responds to changes in the condition of the forex market effectively. The biggest advantage of using the Auto trading software software is that it is able make money for you regardless of the market’s position. However, sometimes auto software makes wrong decisions. It is for this reason that the best kind of software includes what is referred to as a stop-loss strategy feature. The feature makes it possible for auto trading software to cancel trades it does not consider to be profitable. It also prevents the auto software from making any big transactions because of the risks that may be involved. This prevents you from losing money.

Automated software is always on the look out for great trading opportunities – Using advanced calculations, auto trading software is able to track all profitable trades across the major currencies.

Automated software is designed by expert traders – These are individuals who have been in the trading business for a long time.

Most Auto software comes with excellent customer support that is well trained to offer help with any problems that you may experience.

Today, financial investors are equally interested in CFDs and Futures. Both of them are popular as both of them provide good leverage and gearing to the individuals involved in such markets. Both of them carry risk in order to earn profits and in both the cases individuals can manage risk with proper knowledge, planning and strategies. Obviously, risk has to be there as there is profit. Everything which gives you profit involves risk. If someone asks a trader to choose between CFD and Future then how is that supposed to be done? On what factors can one make a choice? Well, these questions seem easy but then they are not easy to be answered. There few differences between the two of them and by understanding these differences, one can make a decision as to what needs to be chosen as per individual needs and requirements.

If we go buy the definition then Futures is basically an agreement to buy or to sell a particular commodity at the set price on a specific pre assigned date in future. It does not matter whether the prices go up or down before or after this particular date. On the other hand, contract for difference trading involves price but there is no particular price speculated and there is also no date to be looked forward to. There is only a contract which creates a relation between two parties and it talks about paying or accepting the difference of price of certain goods. Talking about the second point of difference between the two, well, futures are usually bought or sold in large stock exchanges however on the other hand, CFDs are traded with the help of individual brokers. This makes them more flexible as compared to the first one. They can be easily found in almost all the market areas which includes shares, commodities, goods, indices, currencies etc. The best thing is than an investor can very easily open an account to deal in them as compared to the futures.

At the end of the day, what matters is the comfort ability level of the trader. If a trader is comfortable in a particular kind of market then no matter how many advantages the other one has. Both of them require proper guidance as far as new investors are concerned. It is imperative for new players to understand that they first understand the market trade and then start putting their money on stake. Both the scenarios include risks and till the time as a new trader you are not confident of your learning level you should not start up the game. Starting off with spare money can help a person in a manner that even if he loses the money then his monthly budget will not be impacted.

Many people ask what is the best instrument to trade and the answer to that is dependent on what it is that the trader wants to achieve. Today we will take a look at CFDs vs Stock and weigh up the advantages and disadvantages of each.

Cash, All or Nothing

When buying stock it is necessary to have all of the cash to purchase the stock. While it is possible to reduce this requirement by using margin loans at the very best you will be required to have 30 – 40% of the value of the underlying stock in cash. With CFDs the amount of cash required is as low as 3% for stocks and even less if you are trading indices or currencies. The profit potential when trading CFDs is very large due to the leverage employed and can be 10 – 20 times that available when trading stocks. So for efficient use of capital and profit potential in the battle of CFDs vs Stock, CFDs win hands down.

What Could Possibly Go Wrong?

The other side of leverage is risk as leverage amplifies both gains and losses. The most you can lose when investing in stocks is 100% of your capital, assuming you have not borrowed any money to invest. With CFDs losses can be far larger than 100% of your initial investment, if you do not effectively manage your risk. While it is possible to manage your risk when trading CFDs in the battle of CFDs vs Stock the lack of leverage when trading stock makes risk management much easier with stock.

How Much, The Cost of Doing Business

There are two main costs of trading that can be looked at in the battle of CFD vs Stock. Brokerage will vary depending on who you open an account through, however it is typically lower on CFD versus stock with rates down to 0.08% of the value of the purchase. Interest costs do not apply to stocks, but because CFDs are leveraged, interest charges do apply. The winner here is not clear cut, but the finance charges associated with CFDs could be higher than the additional brokerage paid when trading stock, depending on how long the position is to be held.

Tax Free Profits?

One of the reasons that CFDs were originally developed was to get around stamp duty that was payable in the UK on stock purchases. CFDs were exempt from stamp duty. In Australia the capital gains tax regime does not apply to CFDs with all gains or losses treated as income. CFDs are not eligible for a capital gains discount if held for 12 months or more and do not receive franking credits on dividends. So there are some tax advantages to stocks. Tax advantages vary dramatically from country to country so it is hard to call a definitive ruling here in the battle of CFDs vs stock.

CFDs vs Stock Conclusion

In conclusion in the battle of CFDs vs stock there is no clear winner, it will depend on what is most important to you. CFDs offer more upside potential with less capital investment due to the leverage available. The risk associated with CFDs is higher because of the same leverage, so managing risk is more important to the CFD trader than the stock trader. From a cost perspective CFDs may have an advantage due to low transaction costs, but this advantage can disappear if CFDs are held for long periods of time as interest charges accrue. In conclusion I personally like the access to leverage that CFDs provide and I actively manage my risk to control the impact of leverage on my portfolio.

Platinum is an incredibly tough, rare, yet flexible metal and one that is becoming an increasingly crucial material used in industry. South Africa is the world’s largest producer of platinum, with Russia the second. The largest known reserves of platinum come from the Bushveld Complex, which is North of Pretoria in South Africa. Like all commodities platinum has a set of unique factors that will influence its price. Unlike gold it is not used as a hedge in harsh economic times and that’s because it is used in the production of many key consumer items from computers to cars to catalytic converters. When demand for these goods fall then so too the demand for the materials used in their production.

The price of platinum tends to increase in stable economic times and sometimes can be as much as twice the price of gold. As of 1 April 2010 the price of platinum stands well above the $1600 per ounce mark and has increased 7% since late February. Analysts have pointed to this rise and the increase in manufacturing output in the US and Asian markets as evidence of the world continuing to move out of the recession. And with many analysts predicting much stronger results from some of the world’s major car manufacturers including GM, Ford and Toyota the demand for this platinum looks set to rise. However, any downturn in the economic progress seen recently and we could easily see platinum prices falling. So what next for this precious metal?

One of the ways you can take a position on, and take advantage of the global commodity markets and the price of platinum is via CFD trading. Like any investing the greater your knowledge of the instrument you want to trade the better your chances are of success are, especially long-term. As we’ve seen, commodity prices can be subject to fluctuations so it’s important you are aware that guaranteed stops are available on any trade you make.

A good place to start trading CFDs is with IG Markets. They offer an extensive range of research resources and expert market analysis and commentary to help you increase your commodity CFD trading knowledge.

Start CFD trading with IG Markets.

In brief, futures contracts are contracts to purchase or sell an equity or commodity on a specified future date. This indicates you’re either hedging a position you have, or speculating on the long term value of the specific stock, market sector, currency or interest rate.

In Australia there’s 1 main market for futures traders, the Australian Securities Exchange – the joined entity from the Sydney Futures Exchange (SFE) and also the Australian Stock Exchange (ASX).

Probably the most active of the local futures is the Share Price Index (or SPI), that is utilised to reflect the future value of the market’s leading benchmark, the ASX/S&P 200.

The SFE is 1 of the 10 highest traded futures exchanges in the world by volume, and can be traded in 24-hours a day. It makes it possible for investors to speculate on currencies, interest rates, bonds, commodities and equities.

The objective of buying and selling futures contracts is either; solely for speculation, or for hedging against movements in a share portfolio. The futures market presents a trader the chance to take advantage of bearish sentiment on stocks within your portfolio, while also preserving your existing placement.

Futures contracts are leveraged positions, which implies that the face value of the contract isn’t what you actually pay up front.

Normally, the cost of the contract is only a small percentage from the underlying value. As a result, when you’re right, your gains are considerably higher in percentage terms since you have only outlaid a small amount of the capital to control more stock than you otherwise could have, if you had acquired the underlying share.

Contracts are settled in cash rather than in the shares that they represent, so at expiry, you’ll get the difference between the actual worth of the contract and also the cost you bought or sold, or you will have to pay the difference.

While most professional trading houses and hedgers will trade through the SFE, the majority of retail traders will find that Contracts For Difference (CFDs) are a much more accessible way to trade.

CFDs are an excellent way to speculate and hedge. The use of leverage can magnify profits, but not surprisingly also magnify losses.

Hedging with CFDs utilises the idea of short selling. When we short sell we are trying to sell prior to an expected tumble within the share price. Let’s say you acquire one thousand AWB shares which are buying and selling at $6. It becomes public that management have been included in some rather shady deals with the former Iraqi Federal government. You expect AWB shares to fall in price. To avoid the anticipated falls, you would sell AWB immediately right?

Precisely, so you sell at $6 and get $6,thousand back into your accounts. Let’s say that your hunch is right and AWB shares fall to $4. The scandal blows over, and you choose to purchase back again the AWB shares at $4 simply because they now look cheap.

Now, it should be clear that by getting this fast action you’ve saved your self $2,000. You nevertheless have one thousand shares of AWB as at the start of the transaction, but you’ve effectively made a notional profit of $2000 – this amount is nevertheless sitting in your accounts after the transaction is completed.

Short selling utilises the precise same concept. You’re searching to sell first, and purchase the share back later on after it falls. The only difference with short selling from normal selling is that we do not need to own the shares prior to we sell them. Within the above instance, we didn’t need to own the AWB shares to short sell them. With CFDs, we can merely sell them at $6, after which buy them back later at $4. In this situation, instead of making a saving we’re producing earnings of $2,000.

So, that is short selling. We like to think of the term “short” in this context: “Sure, I would like to shout you a drink after work, but I’m a little short today”. Short refers to not having some thing at first.

CFDs have become an increasingly prevalent investment strategy for Australians. For many who are fresh to the market, however, they can be challenging to understand initially.

Let’s break down CFDs for those novices present.

CFDs are not shares!

In reality, CFDs supply the benefits of trading shares, with no need of you actually having to physically buy, own or sell the shares.

CFDs are more or less like a board game version of buying and selling serious shares in the market. They mirror the performance of a share, or an index.

It’s all in relation to the difference.

With CFDs, you are making a contract with a provider (like IG Markets or like CommSec) about the opening and closing price of a share or index you’re considering.

You’re making an agreement with the CFD provider to exchange the difference between the opening and closing prices of the share or index.

For example you think a company is going to crash. You’re able to contact your CFD provider to stipulate the price of the company’s shares (the beginning of the contract) and what level you believe the shares will fall to (the close of the contract).

Assuming you hit your target, the CFD provider pays out cash relating to the difference between the starting share price, and when the contract is finished.

Most traders only hold CFDs for just a a few days or weeks. While they’re great for short-term trading, they’re not good for long-term trading, on account that each day you maintain a position it costs money.

It’s not a lot of money each day, but it is money all the same. When you buy or sell a share/index/tradable instrument, the standard fee is 10% of the price of the underlying shares.

The good and the bad.

It is good that CFDs are a great deal at a lower cost than trading real shares, as you are only trading on a margin. Plus there’s also the added benefit of receiving access to the company’s dividends paid during the CFD’s life.

However there’s downside, too. Don’t forget CFDs are contracts, signifying they are two-way. You acquire money if the price goes the way you think it does, unfortunately if it doesn’t you will have to pay the CFD service provider when you get out of the contract.

The “borrowing” procedure involved in CFDs also magnifies whatever profits and losses you make, so while you stand to make some decent money, you could also lose a lot more than you decided to put down to begin with.

Like anything in the finance game, CFDs have their pros and cons.