Trading strategies can employ a range of different products and are typically employed to take advantage of more rapid price movements in potentially any share on the market regardless of size or yield. Trading these movements increase the risk for loss however also increases the potential gain. Products used for trading include;
- Shares - If the company being observed has a small market cap or a low share price, it is often easy to buy large(r) amounts and therefore increase the return on positive movements.
- Exchange Traded Options (ETOs) - Offering margin and time decay, the exchange traded option can bring substantial gains and potential losses from movements in large cap companies on the market. ETO’s must be traded with diligence, your CharterMarkets adviser will constantly monitor any ETO position and provide updates when required.
- Contracts for Difference (CFDs) - Another form of leverage, the CFD offers exposure to a company share price with only a percentage of the outlay. This brings with it the chance for higher potential gains but also attracts a higher risk in the form of investment losses meaning any CFD position should be properly and dilligently managed using stop loss levels and profit targets.
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