FAQ

What are some of the advantages – and risks – of trading CFDs instead of shares?

By City Index Unlike traditional shares, CFDs are traded on leverage. Leverage lets you trade the markets using a small fraction of the total trade value. For a smaller initial investment you can take the opportunity to profit from market movements and diversify your trading strategy and portfolio. Potential gains can be magnified, as you…

What sort of equipment and tools do you need to start trading forex?

By Vito Henjoto, Technical Analyst, GFT To start trading forex, the first thing you need is access to the market. Choosing the right broker to trade with is an important step in the journey. You need to choose a broker that’s trustworthy, has great customer service, significant market experience, and a platform to suit your…

Do I get dividends from CFDs? And how does the process work?

Question:  Do I get dividends from CFDs? And how does the process work? Answer:  One of the attractive things about CFD share trading is that, by holding a CFD, you are eligible for many of the benefits that you would receive if you held the shares outright through a traditional means of trading.  This includes…

Which factor do you think affects the Aussie dollar the most?

Question:  What factor do you think affects the Aussie dollar the most – interest rates, commodity prices or China? Which factor should traders most closely watch? Answer:  It is a great question and one that will have different traders batting for different answers. For me, I do have a bias for one, but feel it…

Doubts about covered call options

Question: I am looking for information on covered call options, –           who or what sets the call premium  on a particular share –          Can I use any e- broker or is it only some brokers.  –          What is the usual broker cost –          Any possible down side for shares I already have in my portfolio. Response: Covered call writing…

How do I maximise returns using share price divergence

I am happy with the pairs trade concepts but everyone seems to talk about stocks that have close /familiar relationships. Is there some advantage in associating a long positive momentum position with a short negative one even when they may come from different sectors of the same market? As an example I have recently associated…

Do I pay capital gains tax on inherited Aussie stocks if I live overseas?

Question: I am an Australian citizen who has lived overseas for a number of years. I have recently inherited a number of Australian shares from my father’s estate. (Nothing has gone through yet) I am told that I am required to pay CGT to the Australian Government, being an overseas resident. If so, how much…

Can you use the current value of the SPI 200 as a guide to where the market is heading next?

In the same way as the price of a CFD tells us nothing about the direction of the underlying stock (share), if priced efficiently, the futures price tells us nothing about the market expectations of the underlying SPI 200. In reality, the price of the SPI 200 is simply a financing trade; the spread between…

Where should I place my trailing stop?

The momentum-based trailing stop Choosing to close a position is often more difficult than choosing to open one. The decision to open a position can often be made for you – when some moving averages cross, when a breakout occurs, or when there is an economic or company announcement. In an unsuccessful trade, your stop…

Can I hold just one share so that I can be included in future share purchase plans?

Question: I was wondering your opinion regarding when selling shares and having the intention of selling all shares in a particular stock, to sell all but one, therefore being included in any future share purchase plans or offers etc? There are both pros and cons with the above strategy. The minimum marketable parcel in any…

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