The Online Trading Portal.

This is the place to start on the online trade route. Online Trading, Forex, CFDs, Futures and Spread Betting - the basics covered.

Online Trading - The New Way To Online Trade

Gone are the days where the only way to trade was to stand on a huge trading floor and shout out numbers. Now, you can trade anytime day or night from the comfort of your own home.

There are literally hundreds of online trading platforms available now. The modern trader is spoilt for choice when seeking a compatible service which will guarantee fast and reliable trades when you need them. Technology is very important when working the markets - a slow or unreliable platform could cause a loss when you least expect it!

The online trader can access markets around the globe - the world is at his or her fingertips. Trading global stocks has never been easier!

You will need to seek out a decent broker when you first enter the market. Look out for one that offers guidance so that you can seek advice or tips - this is vital to get to know the market. Essential is the "demo account" option, which all good brokers offer. This allows you to practise the market before entering the real thing. Virtual money allows you to place trades before using real cash.

There are so many trading types - CFDs, Spread Betting, Foreign Exchange, Futures and Options - test them all out before finding the one that suits you. You may find you're much more successful with one than with another.

Remember, all trading is a high-risk activity. Make sure you know what you're getting into before investing.

Futures Trading

One trading type is the Futures variety. This involves speculating on the future price of a commodity. Common commodities to speculate on include: grains, energy, cotton, currency, metals...there are many.

You, the trader, bet on the future direction of your chosen commodity. If its price goes in the direction you predicted, you win. If it goes against you, you lose.

futures trading brokers means you do not actually have to own or buy anything. You are just speculating on the commodity and which future direction its price will take.

A futures contract allows the trader to buy or sell a commodity for a preset price and at a pre-determined time period. He is then obliged to buy or sell that commodity at a future date.

Because of this, you will never actually see the underlying share - the sack of grain, for example.

Futures trading is very high-risk, as it is based on margin. When opening an account, you will pay a 10% margin, on which the trading is based. So if you win, you stand to make huge returns - but if you lose, you stand to lose the whole account content plus added funds to cover the loss.

Make sure you know all the facts before you begin Futures trading. It is not worth risking your money if you are likely to lose it.

Forex Trading

Forex trading refers to trading currency on the foreign exchange market. The forex market is the largest financial market in the world. The foreign exchange market essentially determines the value of different currencies. Trading on the Forex market is almost continuous you can trade 24 hours a day except weekends, i.e. trading from 20:15 GMT on Sunday until 22:00 GMT Friday. Average daily turnover in global foreign exchange markets is estimated at $3.98 trillion.

There is no central location where trading takes place in the forex market. A sizeable portion of forex trading takes place between the largest banks which deal with transactions for large governments and companies – this is known as the Interbank market. However, trading can take place between any two parties over the internet and via the telephone, 24 hours a day. Individual traders usually trade via a broker or dealer. The forex market is not regulated and can be described as an 'OTC' (Over the Counter) market. Because the forex market is referred to as the “forex spot market”, some may confuse it with futures or options. However, the forex is not within the futures or options market.

CFD Trading

Contracts for Difference - or CFDs - allow investors to trade shares without actually owning them. The trader makes a contract with the broker. The trader then bets on a certain stock price and what direction it will take. He then decides how many shares he will bet on. If he wins - if he's correct on the bet - then, when he chooses to close the contract he will be paid the difference between the opening and closing price, multiplied by the amount of shares in the contract. Should his bet be incorrect and the markets turn against him, the trader will lose - he must pay the broker the difference.

So, the profit or loss is made on the difference between the price at which you buy, and the price at which you sell. This is because CFDs are traded on margin. Therefore, investors don't need more than a small amount of the total value of a position in order to trade.

CFDs are made on margin. So, if you buy a CFD you will pay around 10% of the stock you are trading. The remaining 90% will be lent by the broker. Therefore, you will earn the profit if the markets go in your favour. Should they turn against you however, you will owe the broker the losses of the entire contract. CFDs are financial instruments that offer the investor exposure to markets, but at a small percentage of what it costs to actually own a share. Unlike a futures contract, there is no fixed size to the contract, and no fixed expiry date. Therefore, at the end of each trading day, the CFD is either rolled forward so the position is left open without an end date - as long as there is enough margin in the investor account to support this.

Spread Betting

Financial spread betting is very similar to CFDs trading. It allows the trader to take a position - in other words, guess or bet - which direction a market will take. Like CFDs trading, the trader does not actually invest in the underlying share. The trader is given a spread on a live underlying market price on a chosen stock or share. He or she then bets on whether this market will rise or fall.

Financial spread betting is conducted in one currency so the trader is saved the extra cost of exchange rate fees. If the trader bets correctly, and the market moves in their favour, they make a profit of their stake multiplied by each point of favourable market moves. However, if the market moves against them, they will make a loss of their stake multiplied by each point the market moves against them.

Financial spread betting is closely observed and regulated by the Financial Services Authority. While comparisons have been made between financial spread betting and regular gambling, it is in fact a financial derivative product and therefore companies offering trading tools must abide by strict guidelines, rules and regulations.