Characteristics of a Good Online Broker

With most of the financial transactions taking place over the Internet, it has become essential that you choose an online broker for your trading requirements. If you have been using an offline broker earlier, it might be easy for you to check whether they have created an online presence. This will help you move to an online broker platform easily without having to go through the trouble of choosing an online broker.

This is because choosing an online broker is something that should be done with care. You need to be able to look at various options that are present and then choose the one online broker that you think will be able to suit you the most.

An online broker is expected to suggest the right kind of trades for you after understanding your needs. While an online broker is not expected to act like a financial consultant, some of the online brokers that you may come across may actually be great with such tips.

Another thing that an online broker should always provide you is detailed analysis of the stocks and trades that you are interested in. In this manner you shall be able to check out the trends in the prices of the stocks so as to make informed decisions about trades.

An online broker is obviously also expected to execute the trades that you order and manage the same from the online trading account that you have created. Do discuss the brokerage and commissions and read the contract carefully for hidden costs before finalizing.

Trading in Global Markets

With globalization and the proliferation of the Internet, we can see how boundaries are being erased despite the political issues that some of the countries continue to have. Whether you can trade in specific global markets or not is dependent on the rules and policies of the country that you live in. However, in most of the open economies, it is now possible to trade on the stock exchange of other countries as well.

Due to the difference in currencies, trading in the global markets can prove to be extremely challenging. Do not take the leap unless you have understood the pros and cons of trading in various areas like equities, options, futures, commodities and more in the global markets.

You may also want to decide the global markets that you want to dapple in. This is because there shall be various considerations that will affect the economy in the specific global markets that you are trading in and you may need to understand the political, economic and financial situation in the areas. Other factors such as liquidity, transparency and regulations also play an important role.

As in the case of any online trading, you will need to open a brokerage account to trade in the global markets as well. Choose the direct access option if you are confident that you shall be able to analyse the information and decide the trades that you want to make.

Remember that the risky global markets can make you lose large sums of money. This means that you should be careful about how you are investing and you should ensure proper research before you make a move.

What are the Duties of a Stockbroker?

If you have been considering a career in stockbroking and want to become a stockbroker you need to know the duties and responsibilities that you shall have as a stockbroker once you qualify. Reading through this will help you assess whether this is the kind of job that you are looking for. It is important that a stockbroker is trustworthy and reliable since the financial future of the clients depends on what the stockbroker does.

As a stockbroker you will need to recruit clients. This is one of the first things that you are likely to do especially if you are starting your own practice. Cold calls on prospects and soliciting for investment is part of the game. This means that you need to be able to take refusals and move on to the next client without any hard feelings.

Once you do get a client you will need to build relationships with them. A stockbroker needs to ensure that the client has complete faith in the stockbroker so that the relationship can flourish. Without faith it is tough to work together to create wealth.

A stockbroker is also expected to advice clients about the various trades that seem to show opportunity. It is important to understand here that the stockbroker is merely responsible to suggest and the final decision needs to come from the client.

Last but not the least a stockbroker is also expected to execute the trades that the client wants to enter and manage the share trading account for the client.

Characteristics of the Best CFD Providers

With the popularity of CFD trading in Australia, there are now a large number of CFD providers that you will be able to find. Most of these CFD providers are available on the internet and a simple search will bring up the top CFD providers that you may want to consider. However, you also need to know the characteristics of the best CFD providers to be able to choose them.

Check the markets that are offered by the CFD providers. While most provide over the counter CFD trading only the best CFD providers will be able to help you with exchange traded CFDs. It is also pertinent to work with the providers that are primarily CFD providers and not those who provide these services as part of a larger array of financial services.

The fee that the CFD providers charge should be seen from various angles. The overnight financing fee, the transaction fee, margin requirements, capital required, platform access fee and more should be taken into consideration before making any decision.

The best CFD providers also provide added services and freebies for their customers. While some may provide access to the trading platform, free of cost there are others that may help you with some high end technical analysis of the market. Look for the possibility of automatic stop losses too.

Make sure that the spread that the CFD providers offer is low and that you are not losing too much money by going through a broker and not going direct.

Tax Implications for CFD in Australia

As CFD in Australia is becoming prominent and popular, the one question that arises in the minds of many people is the manner in which CFD in Australia should be handled in terms of tax. While there are some that feel that CFD in Australia should be treated like every other investment, there are others who feel that CFD in Australia can be treated as gambling.

To understand the exact tax implication and the manner in which it can be interpreted, you need to know that CFD in Australia is not really a method of investment where you buy the assets. You do not purchase stocks, commodities or anything else. What you do is that you bet upon the future movement of the asset. Despite not owning the asset in CFD in Australia, you can get dividends. The price of the asset and the CFD in Australia are intertwined.

CFD in Australia is often considered to be taxed as gambling, as a regular business or as capital gains. It is considered to be gambling if you are a gambler and have little expertise in the stock market otherwise. The CFD investment should not be a regular thing and the gains should have been a one time or infrequent gain.

CFD in Australia is considered to be a regular business if the investments are done in a regular and systematic manner and if you are trained in stock trading. It is considered to be a capital gain when you are more than a casual gambler but not really a systematic and organized player in the market.

Getting Started with Stockbroking

The stock market is a complicated place where a large number of factors affect the share price of various companies. The number of factors are so large that it I impossible to predict the manner in which the price of a specific stock will move. However, there are many indicators that one can follow. To get started with stockbroking and to be able to solicit clients towards the stock market, you need to have a license to do the same.

To start with, you need to have a score of 85 or above in math, economics and business in high school. These are the various areas that can affect the stock prices and any kind of stockbroking requires you to have this basic qualification. You also need to have a diploma in accounting or an undergraduate degree in commerce or business.

To actually get into stockbroking on a regular basis, you can choose two alternate paths after you have the required qualifications. You can either study in a university for three years and get a degree or enter into stockbroking by taking the vocational education and training (VET) option.

Some of the courses that you can opt for include accounting courses at Macquarie University, Sydney University, University of NSW, Australian National University and more. What you get at the end of the day that allows stockbroking is a graduate diploma in applied finance and investment.

Irrespective of the path that you choose for stockbroking, you will need a license from Australian Financial Services.

Different Types of CFDs

There are basically two kinds of CFDs that exist in the market. One is called the Direct Market Access or DMA and the other is called Market Maker or MM. There are advantages and disadvantages of each of the CFDs and one should understand them before one decides the one that should be picked.

In the Direct Market Access, the CFD order is placed in an order book. This order book is the place where the buyers and sellers get prices for asks and bids. When CFDs are bought and sold in this manner, the trade affects the underlying value of the asset. This is the system in which complete transparency is a by-product since there is no middle man involved.

You can also place orders for CFDs via a market maker. It is believed that the prices that are quoted by the market make are slightly higher than those that are available directly in the market. If you want the convenience of dabbling in CFDs via a middle man, you will need to be ready to pay this amount. While the rates quoted for CFDs in this manner also are based on the market value, there is a personal element of price that the middle man adds to the CFDs.

The speed of transaction in the case of  CFDs ordered in the direct method is faster. There is no intervention of the middle person. However, you may find that you are limited to some of the top stocks when using this method.

Why Should You Trade in CFD?

CFD or contract For Difference is a trade where you can win or lose based on the difference in prices. The person who invests in CFD does not really own the asset but only bets on the direction in which the price will swing and the amount to which the price will move. Here are some reasons why you should consider CFD trading.

- High leverage – Since you do not have to purchase the stock itself and only bet on it, the margin required is as low as 5 per cent. This means that the leverage on the investment that you make can be as high as 20 times. However, it is also important to remember that the leverage can work both ways and you stand to lose a similar amount of money if you lose.
- Absence of an expiry date – A CFD does not deteriorate in value and does not have an expiry date like options. However, there are fees that need to be paid if the CFD is held for more than a day.
- Dividends – Some people believe that dividends are paid to only those who own the assets. However, in the case of a CFD, you can get dividends even when you do not own the asset.
- Easy – the concept of a CFD is easy to understand for all. One does not need to be a great player in the stock market to be able to evaluate various options to invest.

One of the main attractions of a CFD is that you do not need to hold the asset and therefore you do not need large sums of money.

Stockbroking: What Does it Mean and Imply

The Internet, particularly the ability to trade in stock online has been instrumental in changing how stockbroking is carried out.

No matter how you may dislike stockbroking firms for their stiff upper lip attitude you need a stock broker of some sort to buy and sell securities regardless of the market you want to deal in. the first and foremost thing is thus to find a reputable stockbroking firm. Although stock brokers are probably hated as much as people hate lawyers, there are still many brokerages that have the interest of their clients as their first priority.

Stockbroking is the business and process of dealing in securities in a stock exchange. Going by that definition any entity that offers trading in over-the-counter products such as CFDs and forex is technically not a stockbroking firm.

Although, commonly referred to as brokers, these entities are primarily dealers and cannot be said to be involved in stocking broking activities. Both CFDs and forex are traded directly between two principals, you and the provider or dealer (the so-called broker). There is no broker and no exchange is involved in the transaction. Whatever hedging that the dealer has to do, is done by him on his own behalf in the relative exchange (in case of shares and commodities) and interbank foreign exchange market (in case of forex).

All this has been made possible by online trading. Online trading is really why it is now possible for the individual trader to trade in forex, something that was in the domain of only banks and large financial institutions. The ability to trade online is also the reason why newer derivative products such as CFDs are appearing in financial markets.