Singapore CFD Trading-Contracts For Difference Singapore Trading

From Nicholas Tan, Trader and Author of Handbook

On CFDs Trading.

The internet and online brokers have brought about new instruments of trading

and it has led to the opening of new markets to trade. Retail investors and

traders are not limited to trading stocks of their own countries but they can also

now trade a variety of instruments such as options, forex, commodities, and

contracts for difference (CFDs) of different markets.

This means that traders and retail investors now have more ways to profit from

these various instruments and markets. Contract for difference is a relatively

new trading instrument in Singapore. This is the first guide on CFDs trading

ever written and published in Singapore.

This book is written for Singapore traders and investors who want to take

advantage of CFDs in their trading. It shows you how CFDs are traded and the

strategies you can use for both bullish and bearish market conditions. Unlike

other CFDs books published by overseas authors, this book is unique as Singapore stocks are used as

examples when explaining how a trading strategy can be applied.

CFDs is a double-edged sword. If you know how to trade it and use it in your trading strategy, you can reap

good profits using a small amount of capital as it is a leverage product but at the same time, because it is a

leverage product, it can cause you to lose big amount if you have yet to master the art of trading CFDs.

I hope this book will not only show retail investors and traders the potential profits they can make trading

CFDs but at the same time educate them of the trading risks and take the necessary actions to minimise

them.

I wish you every success in your trading.

Nicholas Tan

Also Author of “Handbook On Forex Trading”, A National Bestseller and “Forex Trends and

Profitable Patterns” (Published by Rank Books).

UNLEASH THE POWER OF CFDS (CONTRACT FOR DIFFERENCE) IN YOUR TRADING

Unleash The Power of CFDs (Contract for Difference)

Trading in Singapore

Use the power of Contracts for Difference (CFDs) to maximize your profits and trade in global

financial markets. Trade Singapore stock CFDs, CFDs on ETFs, CFDs on Indexs and CFDs

on Commodities and CFDs on Currencies worldwide.

With CFDs, traders and investors can now grab new trading opportunities across the global

financial markets and trade with more financial instruments. With CFDs, you can trade in both

bearish and bullish markets. You can make money when the markets move Up or Down! You can

trade Singapore stocks, US stocks, Hong Kong stocks, UK stocks and worldwide indices in just

one single trading account using CFDs. Grab a copy of Handbook on CFDs Trading today!

Published and distributed by Rank Books, Singapore.

Educated Traders Are Successful Traders

Get The Right Financial Education To

Be A Profitable Trader Today!

Buy Handbook on CFDs Trading at only

S$19.00 and attend a free

CFD Workshop Worth $188.

Limited Seats. Get Your Copy Now And Register.

Seminar Date: 4th Aug 2011 at SMU (details below)

EXTRA

BONUS

How To Get Started?

You need to open an account with a broker that offers CFDs trading. As CFDs are traded on a margin

account, you will need to deposit money into your account before you can start trading. Some brokers

may require you to put in a minimum sum to open an account.

You must have at least 20% of the contract value in your account before you could trade. While there is

no closing trade deadline, as long as your position is open, it will be revalued daily. Should the price of

your open position drop below 20% of what you have in your account, there will be a margin call. This

would require you to top up your account by a necessary amount to bring your deposit above the 20%

requirement to continue holding on to your open position.

As the name suggests, in CFDs trading, there is no actual delivery of the shares when you buy or sell

CFDs of the underlying shares. When you buy some Singapore Press Holding CFDs, you will not

become a shareholder of SPH. It is just a book entry and when the position is closed, it is cash settled.

It will be either money added into your account or money deducted from your account. However if

Singapore Press Holding were to give out a dividend, your account will be credited with the dividend

amount, if you are still holding the CFDs. However, if you short the CFDs, you will need to pay back the

dividend amount when the share goes ex-dividend and suffer a drop in the share price. If there were to

be a stock split, your CFD position will be adjusted accordingly.

Margin Trading and Leveraging

A CFD is a margin product with leverage. This means that you can buy a large quantity of CFDs with a

comparatively smaller amount of capital. For instance, if you want to buy 10,000 shares of ABC

company at $10.00 per share, you would need to fork out $100,000 dollars ($10 x 10,000) to pay for

your purchase. However, when you decide to buy 10,000 CFDs of ABC company, you are only required

to fork out say 20% of $100,000 or just $20,000 in order to purchase the same number of shares.

Hence, when you open a position, you do not have to put up the full amount of your purchase value.

You just have to put up 10% to 20% of the contract value as margin. While you need to fork out less

than the purchased value of the shares, be warned that you are liable to pay an interest charged on your

position until your position is sold.

On top of the interest charge, there is a commission charge for each transaction.

Why Trade CFDs?

There are many reasons why CFDs are attractive instruments for traders.

Higher Returns On Capital

With leveraging, you can use a small amount of money to make more money.

Here is an example. If you want to buy 1000 shares of OCBC from your normal broker, at $8.00 it

will cost you $8000. You will need to pay up this amount after 3 days. But if you use this same amount

of $8000 as a deposit in your CFD account, with a 10% margin required, you can buy 10,000 shares of

OCBC. Instead of having only 1000 shares, you now have 10,000 shares. If you decide to sell after 5

days at a price of $8.20, you would make $200 from your normal broker if you have bought 1000 shares.

However, if you have bought CFDs, you would have make $2000 for your CFDs position of 10,000

shares. In percentage term, you would have made a return on capital of 25% buying CFDs verses 2.5%

returns if you bought the shares.

Bigger Position Size Means Bigger Profits In Shorter Time

To make $100 for 1000 shares means the price of the share must go up by 10 cents or more. But

if you have 10,000 shares, to make $100, it means the price of the share must go up only by 1 cent.

Hence, with the ability to have a bigger position for less capital, you can profit from small movements in

the share price over a shorter period of time.

Lower transaction cost

While your local internet trading for equity will cost you 0.275%, with other additional cost like SGX

clearing fee, which means your cost per trade is now over 0.3%. But trading in CFDs for the same

shares will cost you only 0.15%. That is almost half your cost. Low transaction cost equates to greater

profit.

CFDs can be used to buy US shares as well. This is where low transaction cost really benefit you.

The transaction cost for CFDs in US shares is 0.1% of the share’s contract value while your normal

broker will charge you 0.4% to trade in US shares.

Shorting the market

The ability to short sell when market is down is perhaps the key attraction of CFDs. You can short

CFDs without restriction. When you trade shares, you are unable to sell without first having the shares

in your CDP account (Central Depository Account). For CFDs trading, there is no such restriction.

However, do note that not all stocks are available for shorting. The list available for shorting varies from

broker to broker.

You may want to check with the broker on the counters available for shorting before you open an

account with them. There is no restriction on the period you can carry your short position as well. You

can carry your short position as long as you like, as long as your account has enough deposit to

maintain that short position. In other words, you can sell today and 10 days later you buy back to close

the position. The other benefit of shorting CFDs is that when you are holding a short position, you

actually earn interest on your short position as well. This means that if the market goes down, you made

capital gain as well as interest!

Transparency

For new comers to CFDs trading, some may worry that the CFD broker will cheat them on pricing.

In CFDs trading, the CFD prices of any particular counter are the prices quoted real-time in the various

exchanges where the shares are traded. The price for OCBC shares CFDs if you were to buy or sell is

exactly the same as the price quoted on the local stock exchange for OCBC shares.

Ease and fast execution of trades

Your CFD broker will provide you with a platform to trade. With the platform, trading is fast and

instantaneous. It takes only a couple of second to confirm that your trade is executed.

Flexible contract sizes

There is no fixed contract size. CFD brokers usually allow their clients to trade in any size. You

can trade any small quantity if your margin deposit is small and does not allow you to trade the usually

board lot in the Singapore Exchange. For example, you can actually buy 750 shares of OCBC if you

only have a small deposit maintained with your CFD broker.

Wide ranges of products

One of the greatest attractions of CFDs is that with one account, you get access to the global

stock markets. You can trade US shares, Hong Kong shares, London, and even Netherlands shares.

You can trade Foreign Exchange with your CFDs account. You can trade stock index from around the

world. With one account, you could trade more than you can possibly monitor!

About The Book:

This book is written for Singapore traders and

investors who want to take advantage of CFDs

(Contracts for Difference) in their trading.

It shows you how CFDs are traded and the

strategies you can use for both bullish and

bearish market conditions.

Unlike other CFDs book published by overseas

authors, this book is unique as Singapore stocks

are used as examples when explaining how a

trading strategy can be applied. This book is

written to help you to increase your probability of

success when trading CFDs.

Confirmed Seminar Date: 4 Aug 2011. Book Your Seats

Now!

In this workshop by Nicholas Tan, you will discover how to expand your trading

opportunties beyond Singapore stocks and reaps potential financial gain from

new trading instruments and markets using CFDs.

Kick-start your learning journey by taking your first trade on a demo account

before risking real money. Come and experience CFDs trading in this free hands-

on workshop.

This CFD Seminar Covers:

- Introduction to CFD

- CFD’s Strategy For Trading

- Introducing the Pair Spread Trading Strategy

- An example for the Pair Spread Trading Strategy

- CFD Index Trading

- Demo Trading with Chosen Index

- Trading with a Trading Plan with Chosen Index

- Methodology for Trading

How to Register After You Bought The Book:

Send an Email with the Subject Header “FREE CFD Seminar” to:

admin@rankseminar.com

Give us your name and contact number.

IMPORTANT: Please also keep your receipt of purchase or bring a copy of Handbook On

CFDs Trading by Nicholas Tan as proof of purchase to enter the seminar room.

IMPORTANT: Only pre-registered readers and those who have been confirmed a seat via

email will be allowed to enter the seminar room on the day of the seminar.

Price: $19.00 (before 7% GST)

Author: Nicholas Tan

Published By: Rank Books

JUST PUBLISHED!

Organised By

About Nicholas Tan

Nicholas Tan has more than 20 years of experience in the area of foreign exchange (“forex”) trading. He

worked for 13 years as a forex trader with banks in Singapore, gathering much invaluable experience in the

process. He rose from the ranks to vice president, making millions for the banks in those years.

From 2005 to 2008, Nicholas Tan was involved in the Diploma in Wealth Management Course at a private

institute where he taught as a freelance lecturer, a module on forex and CFD Trading (stock market).

In conjunction with Rank Books and Rank Seminar, Nicholas Tan has been running a monthly forex trading

course since 2007. This class is now Singapore’s longest running forex course, and has exposed hundred of

participants to his simplified yet highly effective forex trading techniques.

Nicholas Tan is also the author of two best sellers; “Handbook on Forex Trading”, an easy guide to profitable

currency trading, and, “Forex Trends and Profitable Patterns” an easy guide to spot profitable trends and

patterns in forex. Handbook on Forex Trading was ranked among the 10 Top Best Sellers in Popular

bookstores in 2007 for several months. Both books are still best sellers in local bookstores till today.

Nicholas Tan has been featured in the Channel News Asia program, “Cents & Sensibilities EPISODE 6 -

Money, Money, Money: Forex Trading”. On national television, he has given advice on how one can maximize

their gains on the forex market. You can catch him at http://www.channelnewsasia.com/cents/episode6.htm.

Besides a Bachelor Degree in Business Administration from the National University of Singapore, Nicholas Tan

is also a Certified Financial Technician (“CFTe”). This is an elite certification from the International Federation of

Technical Analysts, given to a handful of qualified technical analysts across the world after passing their

rigorous examinations. As of today, there are not many CFTe holders in Singapore.

Get The Right Financial Education

To Be A Profitable Trader Today!

Learn from Nicholas Tan who has

more than 20 years of

trading experience

Photos of The Practical Forex Trading Course

Sessions.