Margin share trading is also known as contracts for differences
(CFD). It is now becoming the most popular tool for trading the
stock markets around Europe, especially the US markets.
CFD trading is similar to traditional share trading, dealing is
done at the cash price of the particular share involved, on the
bid and offer price. Full value payment of the shares is never
required on the maintaining of the correct margin requirement
at 20% of the underlying contract value of shares bought or sold.
While the position is open, the account is debited or credited
to reflect interest and dividend adjustments, the direction of
which are determined to whether a long or short position is taken.
Long positions, interest is deducted on the margined amount and
credited to reflect any net dividend payments. This reflects the
physical ownership of owning the actual shares bought on margin.
Short positions, the account has been credited on the interest
adjustment and debited to reflect any dividends payable, a reverse
of the above.
Range of markets
We are able to offer trading on the below:
- UK listed shares
- US Nasdaq and Dow Jones quoted shares
- S&P quoted shares
- European main market shares
- Stop loss and limit orders
By placing such orders in the market, profits can be taken at
a preset level or losses can also be set at a predetermined amount.
Giving absolute risk management with a risk reward ratio policy.
Conventional share trading or CFD?
- The benefits of margin share trading is the advantage of
trading stocks at the screen price
(cash price) of the share, without needing to calculate any
premium or discount for a future date.
- The ability to trade at a far higher volume level and increase
the profitability
- The opportunity to hedge against actual physical stock through
short positions
- The ability to make money in a bear market by selling short
- No liquidity problems
- No stamp duty
- No payment delays when obtaining profits
- No account periods.
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