INVESTMENTS AND TRADING

Please find information on investment and online trading options available to the individual customer in Australia. Each product can be applied for and controlled online as well as being suitable for both casual and serious investors.

Forex Trading

As the largest liquid trading market in the world with an average of over $3 trillion currencies traded daily, the foreign exchange (or forex) market has many benefits for the investment trader. Almost anyone can get involved in forex trading, and for beginners it is highly recommended to carry out some research and background work. Another good idea is to start by trading virtual money on a 'demo' account. This will give you the chance to practise until you feel ready to give real trade a go. Experienced online traders are already familiar with risk appetite – and knowing your own level of risk is essential.

Forex Trading
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CFD Trading

A CFDs (short for 'Contract for Difference') is a type of trading vehicle or tool. It is formed of an agreement to exchange the difference between the opening and closing price of a particular financial asset – hence the contract. There is no set time limit for a contract and positions are generally renewed at the end of each day. If the asset (usually shares or indices) is lower in trading value compared to the original value, then the buyer is in deficit and will have to make the payment. Generally, the buyer is the client and the seller is the brokerage company. CFD trading is known as derivatives trading because the underlying asset is never purchased. The trader is merely speculating on price movements.

CFD Trading
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Future Trading

Online trading on Futures allows the trader to take positions on largescale commodities without having to raise a large amount of initial capital. By paying an initial margin (usually of between 2 and 10%), the trader can open a Futures Contract. This allows him or her to buy a specified commodity at a specified date in the future. This is set at a “futures price” – in other words, the market trading determined price. Trading is done through a broker who in turn uses a central exchange. These exchanges are tightly regulated by a Government-led regulating body (such as the Australian Securities and Investments Commission (ASIC)). Main commodities commonly traded are food products such as grains, meat and soya, metals, energy, currencies or services such as interest rates.

Futures Trading
View all Futures Trading Merchants here.

Spread Bettings

Financial spread betting gives traders a chance to enjoy tax-free profits. This is because financial spread betting allows you to trade on stocks and shares without paying commission fees or stamp duty. Spread betting is a derivatives trading product, like CFDs – in other words, you do not buy the underlying stocks, you just speculate on where the prices will be at a point in the future. Trading takes place online.

Using an online trading service, the trader is given a spread on a live underlying market price. Then, the trader can bet on whether this market will go up or down. Profit is made when the trader makes the correct bet, and will earn on the stake multiplied by each move the market makes in the trader's favour. When the trader is incorrect, the loss will be made on the stake multiplied by each move the market makes against the trader.

Spread Bettings
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Share Dealing

Share dealing or online trading is good for long term investment. By shares in a company, the trader becomes a part owner of that company. The size of their stake depends on the amount of shares bought. Shares can rise and fall in value, and the shareholder's clever management of shares brings a profit from either buying or selling shares. There are various aspects which will affect share price and value, including market trends and economic climate of a country.

Most people buying and selling shares trade via a stock broker, who in turn uses a central exchange. Using a stock broker is the best and easiest way to trade shares through online trading. Shares dealing is as any trade type a 'high risk' online trading activity as it can lead to loss of money, but with patience and plenty of analysis and research, it can be a rewarding way to invest.