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 Share Margin Financing, borrow to play share

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ianchew
post Aug 3 2009, 05:59 PM

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there is another way similar to margin call CFD.
CFD is an investment instrument that allows you to participate in the price movement of an underlying share. The CFD contract is an agreement to buy (Long) or ‘short-sell’ (Short) an underlying share. Investors increasingly look to CFD to profit in both the rising and falling markets.CFD allows you to hold a more diversified portfolio when you can leverage up to 6.67 times on your initial capital. Trade from margin requirements as low as 15%, which is marked-to-market daily.

say genting 6.45 today which i can buy just using 1.29 . (20% margin)
its a double-edge sword. max profit gaining, and max losses vice versa.

i had been playing with CFD in sti for 2years and turn out my losses are triple times of my initial capital.

This post has been edited by ianchew: Aug 3 2009, 06:00 PM

 

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