CFD, Options, Warrants, Forex, Shares, Products & Services, Psychology, Fundamental Analysis, Technical Analysis

Options provides traders more opportunities in comparison to share trading. Unlike in a futures contract, traders don't have an obligation to buy and sell, and can let the expiry date pass by without doing anything. An options trader can take or write calls, take or write puts, trade a combination of the previous two, do any of the previous steps with the purchase or sale of the underlying shares. With all of this how do you choose the right strategy to make profits out of options trading.

Takers and writers

One of the requirements when becoming a trader is keeping yourself up to date. Financial news releases are reported everyday. Apart from reported profits, forecasts by so called gurus and interviews by CEO provide information about the company that you may be investing or trading on. It is known that whatever happens in the news are mere confirmation of what's already in the market, but what about new releases?

Share trading is not as lucrative as anyone thinks. With the uncertainty of the market, you won't be able to turn $100 into a million, unless you have a big bankroll to make it happen and lots of time in your hands. Its natural for newcomers to lose as much as 10 percent of the capital. The word ''trader'' also conjures up a rather lonely and boring image for people. Someone who is sitting in front of two or more computer monitors, studying and crunching numbers everyday, vigilant not to lose any window of opportunity.

Much has been said about the debate whether which one is more efficient: Technical or Fundamental analysis. Some prefer to based their decision on a stock's movement in the market, while others prefer to look into a company to know what they are buying for. Technical analysts prefer to spend their time on price action and chart patterns without the need to research on the stock's company. Fundamental analysts on their other hand prefer to look into a company's annual performance to make sure that they are not buying some shoddy business.

Trading CFD in ASX is composed of different elements. Previously, price and margins were discussed, so the focus is now on cashflow. This article will take a look into different factors on how money is distributed., who gets paid and when.

Contract of Interest

When trading CFD in ASX, initial margins are required to open contracts. Apart from that, any movements in price is covered by further payments, which are called variation margins.

If you have a long position and the price drops below the position's entry price or the previous day's closing price if it was help overnight, then a trader is required to pay the variation margin. The payment should be large enough to over the adverse movement of position's value in the market.

CFD (contract for difference) is a good way for traders to take advantage of a financial instrument without having to pay at a full price. Its a leveraged instrument that offers potentially big returns for a small outlay. Its a derivative of an underlying financial commodity, so it follows that a CFD's price is determined by that asset. In share trading how do you make sure that the prices are actually equivalent of each other?

In ASX there are four factors in place to make sure that the CFD's price is aligned with the price of the underlying:

There hundreds of companies that you can invest in. If you are a newbie scanning the market to decide what you should buy or where put your money in, the list can be overwhelming. Apart from that the research can be daunting. You have to go through a lot of websites or paperwork. But even before you begin what is it that you have to look for in a company that will make it a good investment?

For convenience, all companies and everything traded on the Australian Securities Exchange have a code identifier. These codes are displayed on ticker boards instead of the full company name. For example, BHP stands for BHP Billiton.

Some traders would say that the minimum requirement for trading the ASX is knowing the stock or company's 3-letter code. Throughout the trading process, it's easier to track instruments with a code. You will usually see 3-character codes, but codes can vary in length depending on the type of instrument.

Breakouts are useful strategies in a volatile market. Traders can make great returns with limited risk, that is if the trading strategy is executed properly. More importantly, you can apply it any style of trading - including intraday and swing trading – regardless of the time frame. However, breakout trading can take a lot of patience which may cause you to jump in to early and end up exiting at a loss. So how do you plan for an objective trade?

Finding the Right Stock