From Apple to Tesla, traders follow the news of publicly traded companies and wish to speculate on their rising and falling values. Trading stock CFDs with TigerWit allows you to do this with ease through our trading app.
Introduction to TigerWit Stock CFD products
Leveraged trading is popular when trading stock CFDs as it multiplies your buying power and allows you to open bigger deals.
Think a company is doing well, or is likely to stumble? Stock CFD trading lets you open buy or sell positions depending on if you think the value will rise or fall.
Whether through our award-wining trading app or through the MT4 platform, you have every opportunity to follow every market movement.
As well as offering its clients access to equity index CFDs TigerWit offers CFD stock trading on more than 20 individual shares that are drawn from some of the world's leading stock exchanges and sectors.
Stock trading at TigerWit is offered through the use of CFDs which have many benefits over traditional methods of share trading, that are designed for long-term investment rather than short term speculation.
You can trade share CFDs from your existing TigerWit online trading account alongside FX, Commodities, Equity Indices and Cryptocurrencies, in a truly multi-asset offering.
Stocks are quite literally a share in a business. Shareholders invest their money into a company, or companies, that are listed on a stock exchange. In return for their investment in the company, the shareholders get certain voting rights, a say in company policy and the potential to share in the future profits of the business, through dividends and other distributions.
The other main attraction that shares offer is that they are tradable instruments whose prices fluctuate. That is they rise and fall and those price changes reflect both the fortunes of the companies listed on the stock exchange and wider market sentiment.
It is the rise and fall of share prices and the ebb and flow of market sentiment that stock CFD traders are interested in.
When you are trading stocks using CFDs or Contracts for Differences you never own the underlying stock or have voting rights. Instead, you are speculating on the rise and fall in the price of those shares. You buy or sell stock CFDs based on your expectations for that company’s share price.
CFDs are cash-settled contracts and that means that stock CFD traders do not need to concern themselves with having to deliver or take delivery of the underlying shares when they trade.
What's more, not having to worry about ownership of the underlying assets means that stock CFDs can be traded long or short, with equal ease (note though that on occasion regulators in certain jurisdictions have restricted the ability to sell short ).
Trading stocks as CFDs is quite straightforward if you believe that a company's share price will rise you open a long, or buy position, in those shares. And if the share prices rise above the entry-level of your trade you have a running profit. That profit will be realised when you close the trade, it is then credited to your trading account.
Of course, if you believe that a company's share price is likely to fall in value then you can open a short sale. And if the price falls below the opening level of your trade then once again you will have a running profit, that can be realised by closing the trade. Which in this case means buying back or closing your short position. Once again, any realised profit will be credited to your trading account. It follows though that any losses you incur through stock trading with CFDs will be debited from your trading account.
Stock prices are subject to the same influences as other financial instruments are. These influences fall into three broad groups: Supply and demand factors, market sentiment and new information, and all three groups can feed into each other as well.
Stock prices and stock market valuations are based on assumptions about the future prospects of businesses and the economic climate. For example, if a local economy is growing consumers may have more disposable income and that may benefit companies who make and sell consumer electronics. They may well sell more of their goods and their share prices could rise in anticipation of those increased sales.
Conversely, the share prices of exporters can be sensitive to exchange rates. For example, US exporters may prefer to see a weaker US dollar as it makes US exports cheaper to their overseas customers, who may buy more goods and services.
However, if the US dollar strengthens, then that makes US exports dearer to foreign buyers and the shares of export-led companies in the USA may fall in value as a result.
News flow and events that affect share prices occur daily and that means there should always be a story or idea to help decide what to buy or sell.
Listed companies have to regularly report on their performance and do so at least twice a year if not quarterly. And when they report they provide a breakdown of their revenue, their costs and their profitability. Companies that are growing revenues and profits, whilst keeping costs under control and that do so on an ongoing basis are likely to be in demand. Because they are growing their businesses and their share prices will likely rise as result.
However, the performance of leading companies is well researched by analysts at banks, brokers and fund managers. Such that when a company reports its earnings, it is not necessarily the headline numbers that matter the most, but the degree of surprise or deviation from those analysts’ forecasts.
Individual share prices will rise and fall under these types of inputs as will the wider stock market and their indices.
It's equally true that markets are forward-looking and are therefore more concerned about a company’s outlook for the months ahead, rather than their performance in the past. That's something that a stock trader needs to be aware of.
This means that management's view on future prospects for their business can be as important (sometimes more important) than their current figures. Such that, good figures in one quarter but a poor outlook for subsequent quarters could mean that a company's share price will fall, because the good news was already priced in.
Walt Disney Co
Advanced Micro Devices Inc
Home Depot Inc
Rio Tinto plc
Royal Dutch Shell plc B
Tesla Motors Inc
Alibaba Group Holding Ltd
CFDs are leveraged instruments. Stock trading using CFDs is conducted on a margin basis whereby the clients trading deposit is geared up or magnified by their broker.Allowing them to control a far bigger position in the markets than they would otherwise be able to afford.
Trading with leverage means that a trader's profits will be magnified by the leverage ratio but by the same token so will their trading losses be.
Trading shares using CFDs is often undertaken on a short-term basis and sometimes referred to as day trading. Meaning that traders following this strategy don't hold positions open overnight. But rather trade in and out of their positions during a business day. By for example following price trends in stocks that are moving and then closing their positions before the market close. However, if you do choose to hold positions open overnight then you will pay rollover swap charges on your positions.