Trading Library

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.

Options and futures are similar in a way that they are both based on trading that involves subsequent events. Buyers and sellers are making a short time gamble that the price of the underlying financial instrument will soar and drop. Both contracts are also considered advanced forms of share trading, require additional training or the use of a specialist to be able to fully understand their characteristics.

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:

When a company's shares are split, outstanding shares multiply. The shares are divided and the price is reduced. Say you have a twenty dollar bill, and somebody offers to give you two ten dollar bills in exchange for it. That's the same concept applied to share splitting. You have the same amount of money, only split into two smaller denominations.

Both of these terms can be easily confused because they are both managed funds, but they do have some essential differences. A superannuation fund is a taxation vehicle while a share fund is an investment vehicle.

A superannuation fund is a pension program that is created by a company for its employees. They are also referred to as a company pension plan. Money deposited in this fund will grow without any tax implications until the employee retires or withdraws.