Trading Library

I often ask myself the question - which shares are being traded the most in the ASX sharemarket? Sometimes I use the local teletext services that you can access on your TV box for this information - if you point it to page 200 you'll get the financial index. The shares with the most traded shares with the highest trade volumes (not necessarily highest net worth) that day reveal the level of liquidity of the stock as well as the most actively traded stocks. The significance of this is simply that as a trader you should be aware of what the neighbours are doing but this doesn't mean you should join in with the crowd - Just to be aware of what the market is and perhaps recognise the activity as a result of some news or market information.

Exchange traded options (ETOs) are versatile short dated financial products that allow investors to;

• Protect the value of individual shares or a portfolio
• Earn income
• Undertake to buy shares for less than their current price
• Lock in a buying price
• Get exposure to shares for limited risk

Here are the basic terms and descriptions that any investor should know as they learn about equity/index options. Alternatively, you can start by listening to a short presentation and come back to this page when finished.

CFD's are leveraged products that trade on any number of financial equities.

A CFD mirrors the performance of a share or index and offers the benefits of trading shares without having to physically own them. It is traded on margin, and just like physical shares your profit or loss is determined by the difference between your buy price and your sell price. However, CFDs offer many benefits over and above physical share trading. This section seeks to explain these.

General Investors - with 'set and forget' rules should consider the next seven investing rules for their own trading plan.

#1 The trend is your friend.
Always follow the trend. Going against it is gambling.

#2 A mate with a hot tip is not your friend.
Hot tips are risky - better if you follow it up with your own research.

#3 Don't buy or sell in one hit, use cost averaging.
This technique can lower the effective cost of the underlying share you are purchasing.

#4 It's time in, not timing, that counts.
Statistics show that time in market pays very well.