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Everything posted by Paige

  1. Hello Jovan, As an investor, you should always be ready to take up certain risks in order to get better returns. By taking up some risks, however, you may end up making losses rather than profits. Some investors who do not take up any risks end up not getting any profit. Similarly, they are less likely to suffer any loss. Therefore, risks are inevitable, and you need to carefully study the market to know when it is right for you to take up that risk or not. One risk that you might face while trading in the ETF is that of tracking the error. This risk occurs when ETF differs from the index performance. This error can occur when an ETF holds onto cash that will receive a distinct return on investment, therefore, causing a divergence between the ETF and the index. Investors will encounter a currency risk when the fundamental assets are in a currency that is different from the designated one. ETFs are also highly volatile, making them a high- risk investments. Investors in ETFs also have no jurisdiction on the investments made in this platform.
  2. Hello Jovan, Exchange-Traded Funds is a disposition of investments such as stocks and bonds. ETFs mostly trace a basic asset, and same as individual stocks, they are traded in a stock exchange market. ETFs facilitate fast buying of assets that ensure assortment with no need to purchase all the individual securities. One reason why ETFs are so popular is because of their additional flexibility. They can be dealt with in a stock market rather than being held up until the markets close. Also, the costs incurred while running an ETF are fairly low compared to those of mutual funds. This typically includes fees that are paid to the manager and other personnel running this platform. ETFs also allow the investors to access and deal in ETFs that have a submission to a particular asset that most probably would have been inaccessible. ETFs allow an investor to reach a certain objective.
  3. Hello Linah, The answer to knowing how ETF work is the creation and the redemption technique. It explains ETFs are a significant tool in the market, how they obtain disclosure of the market that makes them cheap and tax-efficient. The creation and redemption procedure takes place the issuers of the ETF and authorized participants (AP). The AP function like market makers using their capability to exchange foundation units. To create extra shares in an ETF, the AP normally purchases the securities pertaining to the ETF in a good amount and then exchanges this quantity (the security) with the issuer of the ETF. The AP will then obtain one or more formation units. In order to redeem shares in an ETF, the AP will have to gather a significant amount of shares for the ETF that will compose the creation unit. The AP will then exchange these shares with the issuer of the ETF for a good number of securities, which should be of equal value.
  4. Hello Jovan, Leverage is a strong tool for any trader and is a crucial attribute in CFD trading. You can use leverage to play upon proximately mini price movement. You can also use it to speed up your trading space for better exposure in the financial markets. It then allows you to compel your capital to work hard for you so as to achieve higher financial profitability. By depositing some amount of money known as margin, you will increase the vulnerability of the essential asset. Principally you are crushing a snippet of the whole utility of your trade, and your contributor will be lending you the remaining part. These leveraged products, however, can result in losses. In CFD, the profit and losses depend on the whole value of the contract immediately; the trade is shut. Therefore if the price does not favor you, your whole trading account presumably will be canceled, resulting in looses.
  5. Hello Jovan, As a keen investor, selecting the proper cryptocurrency exchange is one of the most significant for you to do. You need to know what you want to achieve before you choose the correct exchange. Choosing the wrong plan could possibly lead to losses. You need to conduct ample research to understand the reputation of various exchanges. Investors have seen themselves in unworthy situations for being involved in exchanges, which turned out to be scams. Some exchanges usually compensate their users under certain circumstances. Therefore, you should take your time and account on whether the exchange you are taking part in can provide you with an insurance fund in case you suffer any damage. You also need to know what the asset prices are since they tend to vary. These variations depend on the user's location, the volume of the item they are trading, among others. You, however, need to do your own research not only on how you can choose the best digital currency for exchange but also on the entire industry to know how it works.
  6. Hello Carlyn, A CFD enables you to hypothesize on when the market prices will rise or fall in a quickly moving financial market containing instruments such as shares. One benefit of CFD is that you can trade on a margin. Here you can short (sell) when you speculate that the prices will go down or long (buy) when you think that the prices will fall. One of the main reasons why you sell an item is to benefit from the fall in price that will result. However, you will only gain if your speculations are true. Otherwise, you may end up making a loss. These losses can, at times, be more than your deposits. It is crucial to study the market well to know when the time is right for you to sell, otherwise, you may end up making wrong speculations, which result in losses.
  7. Hello Jovan, A Contract for Differences is a consensus between two participants who are supposed to trade-off the difference in the starting worth of an underlying asset and at the beginning of the contract and its value at the end of the contract. CFD broker acts as a go-between between these parties by providing the required services and space for trading to take place. First of all, good CFD brokers have to give an excellent platform for trading to take place. They also need to offer spaces in which one can open an account with easily. Their fees also need to be affordable, not forgetting also excellent protection which they need to provide to their clients. They need to not only provide the common CFDs but also be able to provide a wide range of options for the clients to choose from. By this, the clients will be able to diversify their risks into various sectors.
  8. Hello Jovan, Even though cryptocurrencies can act as a medium of exchange and is allowed in most if not all states, they can not be fully accepted as a valid currency, this is because they are less liquid and their demand usually fall so often making them unstable. These cryptocurrencies' supply is also not flexible. Apart from Bitcoin, which can act as a storage of value due to its stern dedication to little growth and good network distribution, other cryptocurrencies whose control is centralized make them impossible to attain the money functions. Bitcoin also is easily accepted as a medium of exchange; even it is in a few places. The whole function of money is usually to act as a unit of account, storage of value, and to serve as a medium of exchange. Cryptocurrencies are so scarce and highly volatile, and therefore it can be hard for them to fully take up the functions which the money does.
  9. Hi Carlyn, Having good strategies is a crucial requirement to trade with Contract for Differences, mostly if you are just new to the field. You need to clearly understand your trading styles before you set your trading techniques. Day trading is among the most popular trading styles with CFDs, and yes, it is possible to use this style. It usually involves purchasing and selling of CFDs on the same trading day. Here you are required to buy a CFD and close your position before the day ends. It is mostly done to makes sure that you do not incur overnight charges, amongst other reasons. These activities are also done online, thus attributing to its popularity since buying and selling of shares has been made easy. Day trading comes with tons of advantages. One of them is that you can be to make a profit since you can speculate long and short trades, thus able to know when the shares will rise or fall.
  10. Hi Jovan, Bitcoin is an excellent example of a cryptocurrency. The legality of any cryptocurrency usually differs from one state to another. Most countries are still changing the rules concerning these cryptocurrencies. It is important to note that most countries do not restrict the use of them, and they have directly allowed its citizens to use them. On the other hand, some have entirely restricted its use. Bitcoin, for example, has been made legal in most developed countries such as the U.S. Canada and Japan. In others such as china, it is restricted. India also has barred its banks from trading in them. Also, the majority of the laws applicable to various assets are also applied to Bitcoin. Such laws are the tax laws, whereby Bitcoin is treated as an asset and not a currency; therefore, it is not taken as a legal tender.
  11. Hello Carlyn, Like any other traded funds, while dealing with ETF, you are bound to pay for several expenses. The exchange-traded fund operates as a typical company, and companies have to incur costs in the course of their operations. One of the apparent costs you suffer is that of brokerage commissions. ETFs usually operate like stocks. And naturally, stocks will incur brokerage fees, so are ETFs. These commissions are generally different and depend on how frequent an investor is trading. You will also suffer Management Expense Ratio (MRE) while trading with ETFs. They come in the form of the management fee, which is usually paid to the administrator of the fund for being a trustee and managing the fund. MRE also constitutes operating expenses. These operating expenses may be fees that are to be paid to the members of the council of the EFTs. Many other costs are normally suffered during the buying and selling of an EFT. Good luck!
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