What are straddles and strangles in options trading?
Question: What are straddles and strangles? Response: The straddle and strangle are popular option strategies that involve a simultaneous buying or selling of an equal number of call and put options with the same expiration date. The only difference between the strategies is that the strangle has two different strike prices, while the straddle has…
Never lose money on shares – using CFDs, but how?
Question: Can investors/traders use CFDs to protect themselves from market losses on their ordinary share portfolios? And how? Thomas Roberts, Financial Writer, IG Markets Answer: This is an extremely relevant question given the current economic climate. After all the rate cuts, the Aussie Dollar depreciating in its currency pairs, the continuing Eurozone crisis and…
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…
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…
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…
If I sell all my shares but one, can I be included in any future share purchase plans or offers etc?
Question: 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? Response: There are both pros and cons with the above strategy. The minimum marketable parcel in any…
How should I set up my margin lending account to protect against losses while the markets are so volatile?
Question: How should I set up my margin lending account to protect against losses while the markets are so volatile? Response: It is important to maintain a well diversified portfolio to weather any falls in the market , most importantly, the portfolio needs to be also diversified against different sectors in the market. This is…
Can I remove the initial cash or sell the shares and still have the margin loan sitting there?
Question: Can anyone answer my question regarding the initial cash or shares required as security for the establishment of a margin loan: Once the loan is established and becomes like a flexible line of credit, can I remove the initial cash or sell the initial share security and still have the margin loan sitting there?…
Can I use a margin loan to buy just one stock?
A Margin Loan can be utilised to purchase just one stock. However, before considering in investing in just one stock, you will need to consider how much you wish to borrow. In the case of the top 20 shares listed on the ASX, brokers can lend up to 65% of the current value of these…
How are CFDs taxed?
Search the net for guidance on how profits and losses on CFDs are treated for tax purposes, and what you can and can’t claim as deductions, and you’ll find plenty of “information,” not all of it useful and much of it misleading. Discussions in stock trading forums typify the confusion that surrounds CFDs and tax,…
