What is Stocks?
Trading stocks is one of the most interesting opportunities for traders worldwide to invest, as it opens a variety of industries, companies, and countries to select. The owner of Stocks holds the Stocks in the company they have chosen to invest in. It is a diverse process, the market offering many trading opportunities across a plethora of industries. Share prices can be influenced by many events on the financial market, including mergers, acquisitions, company news, earnings, and global market events.
Main Features of Stocks trading
Trading Share CFDs vs. Index CFDs
An index reflects the average movements of all the stocks within an index, which can result in lower volatility.
Share CFDs reflect the price movements of individual shares which can be more volatile. While it’s rare for one news item to move an index more than a few percent, it is fairly common for a share price to move 5% or greater in a day.
Share CFD trading concentrates on a single company, while index CFD trading concentrates on overall market sentiment.
- Higher volatility
- Often move over 5% when news is released
- Influenced by company-specific news
- Access multiple indices with one trading account
- Trade market action from around the world
- Go long and short, and use leverage with small or large amounts of capital
Shares Trading Hours
|Commonwealth Bank (CBA)||10am – 4pm Sydney time|
|BHP Group Ltd (BHP)||10am – 4pm Sydney time|
|Westpac Banking Corp (WBC)||10am – 4pm Sydney time|
|CSL Ltd (CSL)||10am – 4pm Sydney time|
|Woolworths Group Ltd (WOW)||10am – 4pm Sydney time|
|Wesfarmers Ltd (WES)||10am – 4pm Sydney time|
|Telstra Corporation (TLS)||10am – 4pm Sydney time|
|National Aust. Bank (NAB)||10am – 4pm Sydney time|
|RIO Tinto Ltd (RIO)||10am – 4pm Sydney time|
Advantages and Disadvantages of Trading Share CFDs
Benefits of trading CFDs
- Individual shares can experience large price moves as companies fall in and out of favour.
- CFDs allow traders to profit from rising and falling share prices and to use leverage to increase exposure.
- Share CFDs can be used to trade pairs. A par trade comprises a long position in one stock and a short position in another stock.
Things to be aware of
- Share prices can move quickly or gap when unexpected news hits the market.
- As with any leveraged instrument, large losses can result from poor risk management.
- When trading share CFDs, traders should keep up to date with company news.
How to calculate CFD margins?
When engaging in a Contract for Difference, you are only required to deposit a percentage of the contract’s full value. This is called a margin and it allows traders to open large positions while investing a fraction of the value. The margin is used as leverage, giving traders full exposure to the position. A margin is required before opening a position on your account. Your account should also hold extra funds to cover any potential losses and stop your account going into margin call. Always remember, leverage is a double-edged sword. While it can maximise your profits, it can also increase your losses.