Contract For Difference

CFD – Contracts for Difference

What is Contract for difference or CFD?

Contract for difference (CFD) provides the means for traders to trade in different markets using flexible strategies, which is surprisingly done at a fraction of capital required by the traditional trading. As the name reads it's a contractual agreement between two parties to settle the difference between the closing price and opening price at the close of contract.

What are the features of CFD?

Features of CFD are as follows :

• Underlying Investment Product : CFDs are underlying products and their prices track the underlying products closely.
  
• Portfolio Diversification : Customers can diversify their shares and CFD portfolio with shares from Singapore, Hong Kong, Malaysia and United States or with Indices from Singapore, Hong Kong, Japan, Taiwan and United States.
  
• Short Position : A CFD allows a customer to take a position on a share or an index without actually having to buy and sell the shares themselves. Therefore, CFD Customers can take short positions and not be limited to the T+3 days contra period or the need to engage in SBL.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
• Leverage : As CFDs are leveraged products and traded on margin, customers only need a small percentage (as low as 5% for World Indices CFD and 10% for Equity CFD) of the total contract value to establish a position.
  
• 30 Calendar Days Contract Period : Each CFD Contract has a contract period of 30 calendar days. Customers can choose to close the contract any time before it's expiration on the 30^th Calendar day. If not contracts are not closed within these 30 days, they will automatically get renewed based on the market closing price of the underlying product on the 30^th calendar day.
  
• Sophisticated Trading Strategies : Customers have the added ability to protect their existing shares portfolio against adverse market conditions by using CFDs to hedge their exposure via stra tegies such as pairs and spread trading. 

Trading in Malaysian Stock Market

Trading in Malaysia stock market requires some below written stock picks to get start.

Before investing it is very important to know the listed companies in stock market and the stock buy today. You can get no. of stock markets for trading. It should be on dependence of the stock market at that time, to find companies listed in Malaysia stock markets to get more profits.

Open a Central Depository Account System with Bursa Malaysia, before investing in Malaysia share market. There is an electronically operated book entry system called CDS, record & maintain shares of owner with their transfers. Just like saving money in your bank account, and keep your share in your CDS account. There are two types of CDS account termed as “Nominee” & “Direct” account which you can open.

 1) Nominee Account: In such accounts your stock broker holds all your shares on your behalf. The main advantage of this accounts is that your stockbroker takes the responsibility of your administrative tasks or any paperwork work for you.

 2) Direct Account: In Direct account, you can hold all your activities & tasks related to your shares. It is just reverse of nominee accounts.

As per requirements, you can choose any account. But if you are new in stock market Nominee Account should be helpful for you

Once CDS account is created, broker or advisory firm helps you to start stock trading. It is a difficult task to earn money from trading. It requires a good practice and to be an expert by getting accurate stock recommendations. Practicing stock trading also includes a detailed research on company’s relationship with customers, company’s business strategies and where it is placed among its other competitors.Investor should trade analyzing complete market trend and understand the fundamentals about the listed companies and its technical analysis to trade in share market.

Register yourself for our Customer Educational Programme - Singapore & Malaysia to enhance your skills of trading. 

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Successful Online Stock Trading, for Beginners

Investing in stocks is not as difficult as it seems. If you have some basic ideas, then stocks can be very remunerative. Stock market trading and share trading are often pretty overwhelming for beginners. It is not particularly troublesome, if you are doing it on-line. Several online brokers with easy platforms are available for you for trading stock. Since you have no idea about the market so you will have to observe how trading works.

Give a lot of thought on what on-line stock trading willing to do. Understand the fundamentals of stocks, important ratios like EPS, P/E, Book Value etc. This will help you to understand how stocks are valued. Get a deep overview on topics like Intraday trading, STBT or BTST trading, get a proper knowledge on what type of trading you wish to invest your money in. There are lots of options in which one can invest - Stock Market changes every day every minute, it's better to play according to the market trend.

Everybody concentrates on what and when to purchase stock, yet few ever consider the best time to offer. Try not to let your stock additions vanish because of disregard. Plan ahead. Before you get in, dependably know the particular conditions that will flag when is the right time to get out.

Stock exchanging includes hazard. A great many people deliver genuine harm to their exchanging record before they figure out how to win reliably. In spite of the fact that it may not appear to be alluring, risk management is the key for fruitful online stock trading. The best way to get the prize is to control the danger.

If you are still confused about stocks you can take help from skilled Stock Tips advise. It is best to raise all your doubts about Stock Market investment with them for a proper closure. CapitalVia Consulting Pvt Ltd can help you with that. We are a pure play share trading Malaysian advisory. We're focused and driven to offer the best and highly accurate Malaysia Stock Tips and recommendations to our clients; based on the Research done on Fundamental and Technical Analysis of the Market.

We're beaming to announce our next CEP (Customer Educational Programme) in Malaysia and Singapore. This seminar will help you grasp some obscure things about the stock market. So grab this opportunity and register yourself FREE for the event here :

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We look forward to welcoming you at the event.. Cheers!

'Know-How' of the Stock Market

Seen the numbers with company names in green upside arrow and red downside arrow on the top of a newspaper? On the sidebars of the News channels? Wondered what they are?

It's the stock market index. The market looks very complicated with all the numbers and stats, however it's very interesting once you learn how the market works. 

So if you're interested in the market, but never tried entering it as you fail to understand the market, then you have landed at the right spot. 

You will get to learn about the stock market from the scratch here.. 

Below are the basics (in general) of a Stock Market

What is Stock Exchange?

A market wherein the securities are bought and sold. Securities are financial instruments, such as : bonds, debentures, shares (stocks) and warrants. 

How does the market work? 

The market is divided into two : Primary Market & Secondary Market. 

Primary Market :  It's a platform where the Initial Public Offering (IPO) is done i.e. the companies introduce or issue their shares in the market. 

Secondary Market : It's a platform wherein the traders trade the initially issued securities (without the involvement of the issuing-companies). This Secondary Market is what people refer to when they talk about the Stock Market. 

Why do companies list their securities or stocks on the Stock Exchange? 

Companies may decide to issue their securities (shares or bonds) for various reasons. The ultimate aim however is to raise capital. Now this need of raising the capital could be an outcome of need for expansion, repayment of debts or the most general - start up capital. 

When you buy a share of a firm, you're buying a piece of the company's ownership. The size of stake depends on the number of shares you hold against the number of total shares of the company. 

Types of Traders

There are mainly two types of players in the market - Stock Traders and Stock Investors. 

Stock Traders : Stock traders are more interested in the market's analysis than that of an individual company whose share they own. These are people who are interested in short term gains lasting anywhere from seconds to weeks. 

Stock Investors : On the other hand stock investors are the ones who use their own money to invest in the shares and recognize stocks are an ownership of a company. They believe in buying the stock and holding it on for a long period of time to make huge profits. They earn profits in the form of interests, income or value appreciations.

Types of Trading

Depending on how long a trader holds on to a financial instrument - trading can be classified into the following categories :

Day Trading : It's a type of trading wherein the buyers and sellers trade their financial instrument on the same day i.e. all tradings are closed before the market closes down for the day. Traders who participate in day trading are called Day Traders.  Day trading is not advisable for beginners as it involves quick decision making and actions.

Short Term Trading : A trade period of more than one day to a few weeks is called Short Term Trading. A short trade is entered by making a sell position, which is covered by buying after one day or in a few weeks.

Medium Term Trading : A trade period from a few weeks to months is called Medium Term Trading. A trend is followed with tailoring stop loss.

Long Term Trading : In this type of trading, the stocks are held on for months to years. Investment decisions are made based on the fundamental analysis of a stock. Profit from growth  of the company, dividends and bonuses attracts this type of stock trading.

Hope you enjoyed this bit of information about the stock market. There's more to come, so keep an eye out on our blog.

We believe that this opportunity will help you learn and grow your knowledge and understanding of the stock market. So give yourself a chance to learn more and become a kingpin in this field.

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