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Pulse Markets Daily News
Our Trade Alerts have been very successful since inception and are independently audited by a forensic accountant - we are confident we can help you improve your CFD trading performance...find out more
Pulse Markets was formerly known as VBM Capital.
Existing VBM Capital clients can still log into the trading platform by entering your details in the top right corner of this page.
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TRADING OPTIONS  |
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| WHAT IS CFD TRADING? |
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CFD Trading allows you to gain exposure to Australian and international shares, indices, FX and commodities on margin without having to physically own them. Therefore when opening a CFD position you are not required to outlay the full value of your market exposure.
Your CFD margin, or deposit if you like, starts at 1% of the total value of the trade. This margin requirement will vary depending on liquidity and volatility of the underlying share.
CFD trading is a more efficient use of your capital because you only have to allocate a small proportion of the total value of your position to secure a trade, while maintaining full exposure to the market. This enables you to magnify the returns on your investment.
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| CFD TRADING ARTICLES |
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Introduction to CFD Trading
A CFD is a Contract for Difference, through which a person can profit from changes in the price of the underlying share. If a person bought a CFD on a share that is $4.00 and the price increases to $4.40, that person makes a 40c profit on each CFD. Therefore, if 500 CFD’s were bought, a person would make $200 (($4.40-$4.00) x 500).
Understanding CFD Trading
CFD trading is gaining popularity with many private traders due to the benefit CFD trading has over conventional trading. A CFD is an agreement between two parties to exchange the difference between the opening price and the closing price of an underlying share once the contract has been closed.
Short Selling / Long Positions
Short selling simply allows CFD traders to profit from falls in the share market. As traders know, the share market doesn’t always go up. Nearly all stocks experience falls at some stage, even if the fall is only for a short period of time.
CFD Trading – Intra Day Trading
Trading CFDs intraday means you buy and sell the CFD within the same day and therefore do not have to pay the financing interest that would be incurred if you held a long position overnight or longer.
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| FINANCING COSTS |
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| On long positions held overnight or longer, financing interest is charged at the RBA cash rate + 2% p.a. over the entire face value of the position held (at time of writing RBA cash rate is 7.25%). For short positions, you are paid the RBA – 2% p.a. for the face value of your position. Financing is calculated and charged daily. |
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| RISKS |
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| Trading CFDs carries an inherently higher level of risk to your capital than traditional share trading. Derivative products (including CFDs) may not be suitable for everyone, so ensure that you fully understand the risks involved, and seek independent advice if necessary. |
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