What is Margin Lending?

Margin lending is the term used when you borrow money to invest in shares. There are various pros and cons of using margin lending to be able to invest in shares and while there are some people that extol the virtues of this kind of borrowing, there are others that will warn you against margin lending too.

When you borrow money, the bank makes sure that they take a form of security from you in order to ensure that their money is safe. In the case of margin lending, the security that the bank accepts is the shares themselves or the investment that you are making. Those who consider margin lending to be a good option feel that the maximum that you stand to lose is the amount of money that you have put into the stock purchase.

Margin lending therefore allows you to purchase some of the blue chip stocks that you would otherwise have never been able to purchase in the first place. This kind of an option is used immensely when a popular blue chip company is offering an IPO. Retail investors generally purchase the stocks with margin lending at a price and then when the rate shoots up on the opening day, part of the shares are sold off to pay back the loan immediately.

It should however, not be forgotten that margin lending can be risky business. The manner in which shares move can be so rapid that you may not realize before you lose out on all the amount that you have invested.

Essential Features of a CFD Trading Platform

With almost any kind of a market maker option that you choose for CFD trading, you are also likely to get a CFD trading platform that you shall be expected to use to make the trades. Before you choose a CFD online broker, you should take a good look at the CFD trading platform since it is one application that you shall be using fairly regularly.

The only way in which you can assess the CFD trading platform is by using it for a while. You can do this even before you sign up with the CFD trader because most of them allow for a period of trial for clients to evaluate the platform. Look at the manner in which the data has been represented and the specific charts and graphs that have been used. The data that is analysed and the manner in which it is represented can actually make a lot of difference to the information that you are able to pick out.

Each and every CFD trading platform that you consider should always have a stop loss option that you can exercise the moment you place a CFD trade. This is because you can suffer high level of losses with CFD trading just as you can gain manifold too.

Do not forget to note the hours that the CFD trading platform is available for use. You do not want to be in a situation when you want to place a trade and the platform just does not allow you to.

Features and Benefits of a CFD Tracker

A CFD tracker can help you in various ways when you are investing in CFD. The fact is that you need to be able to make your own decisions when you are trading in CFD in the direct market access mode. The CFD that you have invested in follows the same path as the underlying index and therefore the same factors that affect the price of the asset or stock will affect the CFD too. A CFD tracker can help you in understanding the right decision to take with regards to various stocks or assets.

A good CFD tracker should allow you to customize the financing option so that you can set the leverage to the one that you want. Some of the good ones allow clients to choose between 0 per cent and 99 per cent. While the leverage increases the profits that you can expect, you also stand to lose that much in case of a loss.

It is also not uncommon for a CFD tracker to include factsheets on various products and assets. These include details about spreads, margin rates, trading hours and other details too. Technical indicators are also provided in such a CFD tracker in the form of charts and graphs that can be referred to easily.

Another awesome feature of an efficient CFD tracker is that it allows you to invest right off the chart. So as you are browsing through the various assets and you feel that one of them is worth investing, you can just drag and drop the asset from the chart into your portfolio.

Benefits of CFD Training

Unlike trading in the stock market CFD trading does not require too much time to understand. However, this does not mean that CFD training is redundant and that you can jump into trading is CFD without any kind of CFD training. Despite the fact that trading in CFD is relatively simple, CFD training can provide you with some basic jewels of wisdom that you can use easily when you invest in the market.

CFD training will tell you that you do not need a large capital to invest in
CFD. Since you do not own the asset, you do not have to have the large amount of money to be able to trade. You need to just bet on the direction that the asset will go. At the same time you do need to know the tricks of the trade unless you want to lose money slowly.

When you take part in the simple and easy CFD training, you realize that you are entitled to dividends even though you do not hold the asset. You can also take part in corporate actions and stock splits. With CFD training, you learn how to use small amounts of money to make it large as your money grows with the high leverage that is offered in this investment.

Those who have been a part of CFD training know that they can even benefit from a falling market based on the kind of bet that they have placed. You only have to be right about the direction in which the asset is going.

All About Trading Platforms in Australia

Online trading has become a common thing these days. Almost anyone who is interested in making some money on the side also dapples in some kind of trading, be it share trading, forex trading, commodities trading, options or CFD. However, retail traders need trading platforms to be able to trade from the convenience of their homes of their office cabins too.

When you are choosing trading platforms in Australia you need to know a couple of things. Firstly, most of the trading platforms that you are likely to come across are created in Europe. This means that they may have some specifics that are associated with share trading in those countries that they are developed in. Look for trading platforms that are created in Australia or those that have been adapted from open source programming for the Australian market.

When you are looking for trading platforms you also need to know the kind of trading that you are likely to get into. There are various trading platforms that claim to be great for all kinds of trading irrespective of whether it is forex trading, share trading or commodities trading. However, the fact is that trading platforms that are created especially for different kinds of trading are likely to be the best.

Unless you are looking for trading in various kinds of investment options at the same time, choose one that specializes in the area of trading that you are most interested in. Try out the platform for the trial period that most trading platforms offer and then take your decision.

Benefits of Share Trading

There are many people who are extremely sceptical about share trading because of some horror stories that have been told about how people lost all their monies in share trading over a few months. While there is no doubt that you can lose large sums of money in share trading, it should also be known that share trading per se does not mean loss. The whole thing depends on the manner in which you invest.

One of the main benefits of share trading is the fact that you can own a part of the best companies that there are and benefit from the dividends that they pay. However, it is up to the investor to find out the companies that seem to be on the growth path.

Share trading can get you better returns over time than any other kind of trading. While real estate also proves to be a good bet at times, the capital that you need to be able to invest in land is extremely high. With share trading, you can diversify your portfolio and invest in various sectors so that you can hedge your risks to a large extent. You can also spread your investments over growth companies and those that are likely to bear fruits in the long run.

Unlike real estate, share trading is far more liquid. In case of an emergency, you can decide to sell short and at a loss if you need to money for urgency. Finding buyers for your shares is not something that is tough at any given point in time.

There is no dearth of information about the companies that you are considering for investment. Most of the financial channels offer analysis on various important shares that are catching the eye of investors too.

How Can You Learn to Trade CFD

The good thing about CFD trading is that when you start off to learn to trade in this area you do not have to spend months trying to perfect it. CFD trading is easier to learn to trade and once you have mastered some of the basic concepts, you are ready to go.

Some of the major reasons why people want to learn to trade CFD is because of the high leverage that it allows you. There is also the advantage of low commissions and the opportunity to gain in falling markets. When you learn to trade CFD you also hedge the regular portfolio that you have in an extremely effective manner. Despite the fact that you do not have to own the assets you still have the benefit of dividends.

With these benefits many people get attracted towards CFD. However, you need to learn to trade CFD in the right manner. Going after high leverages when you have just learnt to trade CFD is not a good idea. It is a good practice to slowly increase the leverage on your own. Only professional traders should look for leverage between 7 and 10.

Despite the fact that you are betting on the direction in which the asset will move, you do need to have some understanding of the underlying asset in order to be able to bet appropriately. A good trader who has taken the effort to learn to trade CFD will understand that keeping the CFD trading costs low can make a large difference in the overall returns from the trade.

Pros and Cons of CFD Trading

Before you start anything new you need to be aware of the advantages and disadvantages of the same. This is also the case with CFD trading, a different kind of trading than the regular stocks that you may purchase. When you know the pros and cons of CFD trading, you are able to maximize the benefits and watch out for the pitfalls too.

Pros of CFD Trading
The amount of leverage that you can expect with CFD trading is extremely large. You do not have to actually purchase the asset and therefore the amount of money required is also low. You do not have to bend towards penny stocks because you cannot afford the blue chip stocks now with CFD trading. CFD trading can be done on a large range of assets like forex, stock indices, shares, energies, commodities and bonds too.

Cons of CFD Trading
The massive leverage that CFD’s have can also prove to be a disadvantage since the amount that you lose is also manifold when you lose. The large leverage is therefore a double edged sword. You need to watch out for the financial fee that accrues when you hold a CFD overnight. So while there is no expiry date, the overnight charge needs to be looked out for.

The advantages of CFD trading far outweigh the disadvantages. The disadvantages are basically things that you need to watch out for and can be managed with some amount of planning and control. Getting the hang of CFD trading is also easier than any of the others too.

Basics of CFD trading

A CFD or contract for difference is a tradable derivative product. As the name suggests, CFD trading is based on speculation on the price of the asset it refers to. The settlement of profit or loss is done on the basis of price difference,

If you buy a CFD for AUD 25.50 and sell it after a few days at AUD 27.50, the counterparty to the contract, usually a CFD provider, pays you the difference, which is AUD 2. CFD trading is done in lots and depending on the price of the underlying asset, a lot may comprise of any number of units. In this example, if the CFD represents 100 units, your overall profit is AUD 200.

CFD trading employs a high level of leverage. This allows traders to initiate high value trades with a small capital. This is commonly known as margin trading. In CFD trading margins can be as low as 5%. So instead of having to put up 2550 dollars in the above trade, you employ only 127.50 but still get the full benefit of 100 units should the price move favourable to your position. A profit of 127 dollars on an outlay on 200 dollars is something that you cannot expect while trading directly in the underlying asset.

Besides the high level of leverage, CFD trading allows access to global markets from one platform as most providers offer CFDs for assets in international markets as well. There are no transaction fees. While buying, a trader pays the ask price, which is always more than the bid price, the price at which a trader can sell.

CFD trading has many advantages. However, traders still have to learn how to manage the risk associated with trading in markets.