Why do CFD traders go short?
“To short” is a trader’s or investor’s term to short sell a financial product. “To short” is the opposite of going long. Going long is the term used for when a trader or investor buys low and aims to sell higher. Going long is very common and is the standard strategy of investors. “To short”,…
How do you trade Australian shares after hours?
The market opens at 10:00am, and normal trading occurs until 4pm. From 4.01pm to 4.10pm, the market goes into a pre-open phase where investors may continue to enter orders into the market. The ‘Closing Single Price Auction’ (CSPA), determines the closing price of stocks each trading day and this occurs between 4.10pm and 4.11pm on…
What is a stop loss?
A Stop Loss is an instruction for a particular share in your portfolio to be placed for sale on the market when it trades at a pre-determined price. You decide which share you wish to sell, and set an acceptable exit price below the share’s current trading price. Imagine you own shares trading at $10.00…
Why don’t stocks begin trading at the previous day’s closing price?
Like many things in the world, the stock market relies on the power of supply and demand. The stronger the demand for a share in a company, the higher its price will be. Alternatively if less people are interested in buying a share of a particular company, its price will drop. Before the market opens…
What is the smallest and largest number of shares that you can buy?
The Australian Share Registries, which manage the registers of companies, will allow an initial minimum parcel of $500 worth of shares to be purchased. Once that original number is purchased, the investor can buy smaller parcels to add to their holding. But as every trade incurs a brokerage fee, it may make more sense to…
What does it mean when a share goes ex-dividend?
To explain what it means when a share goes ex-dividend, we should first understand what a dividend is. A dividend is a taxable payment which is given to shareholders by the company they are invested in. Dividends are usually paid as cash (in the form of a cheque or by EFT if requested), however, they…
How do I determine the best stock to trade?
This is a common issue confronting new share traders who have decide to go the online route and do it themselves. As you have mentioned “trading”, I will assume that it is not long term investing that will be the philosophy of your account. First, you need some education about how you will trade once…
Why do some stocks have a bigger gap between Bid and Ask prices?
Recent sharp declines on the Australian share market have highlighted one of the most common misconceptions when it comes to trading shares: that heavy selling alone contributes to the price of a stock going down. It sounds as plausible an explanation as the reverse – that intense buying activity in a stock will push its…
When stock prices fall, where does my money go – can money just disappear?
When you hear that the sharemarket has lost $40 billion dollars in one day, it can be quite terrifying. How can so much money be wiped off the market in one day? Unless your stock has been going up, it’s difficult to make money in a falling market. In fact one of the few ways…
Why do companies care when their share price falls?
From a transparent point of view it can be confusing to wonder why companies care when their share price falls. After all, listed companies have already received money from investors, when they first sell shares through an Initial Public Offering (IPO). What happens in the secondary market, when investors buy and sell to each other…
