Shares
Shares represent ownership in companies, such as Apple, Microsoft, or Tesla. When you trade shares, you're participating in the success or failure of a company. As businesses grow, their share prices can rise, providing an opportunity to profit. Conversely, if a company underperforms, share prices may decline, presenting a potential for losses.
Why Trade Shares?
· Direct exposure via Spread Bet and CFD to individual companies gives you a clear view of their performance.
· Share prices fluctuate based on company fundamentals, news, earnings reports, and market sentiment.
· Shares can be more volatile than other asset classes, offering opportunities for traders who seek price movements.
Example: If you believe a company like Tesla is poised for growth due to new product launches, you can trade its shares to potentially profit from the anticipated price increase.
Please note, all trading involves risk, clients can lose money as well as win. Risk Management.
Indices
An index is a collection of shares that represents a specific market or sector. Indices, such as the UK 100 and US Tech 100, track the performance of the largest companies within a particular country or industry. Trading indices gives you exposure to an entire market segment without the need to buy individual shares.
Why Trade Indices?
· Indices reflect the overall health of an economy or sector, making them a more stable choice for those who want to trade broader market trends.
· With one trade, you can gain exposure to multiple companies, reducing the risk associated with individual stocks.
· Indices tend to be less volatile than individual shares for those seeking broader market exposure.
Example: If you expect the UK economy to perform well over the next quarter, trading the UK 100 allows you to participate in the general movement of large UK companies without having to pick individual shares.
Please note, all trading involves risk, clients can lose money as well as win. Risk Management.
Commodities
Commodities such as gold, silver, and oil are essential raw materials traded globally. These assets often respond to changes in supply and demand, geopolitical events, and overall economic conditions. For instance, oil prices can rise when supply is disrupted, while gold is often perceived as a safer option during times of market uncertainty.
Why Trade Commodities?
· Commodities are influenced by global factors like weather, geopolitics, and economic data, making them ideal for traders who follow global events.
· Commodity markets operate around the clock, allowing flexibility for traders in different time zones.
Example: If geopolitical instability is affecting oil supply, you can trade oil to potentially benefit from rising prices.
Please note, all trading involves risk, clients can lose money as well as win. Risk Management.
Currencies
The currencies market involves trading one currency against another, such as EUR/USD (Euro to United States Dollar) or GBP/USD (Great British Pound to United States Dollar). Currency pairs are affected by economic indicators, interest rates, and geopolitical events. Currencies are among the most liquid assets in the world and can be traded 24 hours a day, five days a week.
Why Trade Currencies?
· The currencies market is the largest financial market in the world, offering unparalleled liquidity.
· Currency prices are highly sensitive to economic data releases, interest rate changes, and political developments, providing multiple opportunities.
· With 24-hour market access, you can trade currencies from anywhere at any time.
Example: If you anticipate the US Federal Reserve will raise interest rates, you might expect the USD to strengthen against other currencies, such as the EUR or GBP, presenting an opportunity to trade accordingly.
Please note, all trading involves risk, clients can lose money as well as win. Risk Management.
Interest Rates and Bonds
Bonds are debt securities issued by governments or corporations to raise capital. When you trade bonds, you’re speculating on changes in bond prices, which are primarily influenced by interest rates. Bonds can be a lower-risk asset compared to shares due to their fixed nature, but they still provide opportunities for traders to profit from price movements.
Why Trade Bonds?
· Bond prices are inversely related to interest rates: when interest rates rise, bond prices typically fall, and vice versa.
· Trading bonds can offer diversification in a portfolio, especially during periods of volatility in equity markets.
Example: If you expect UK interest rates to rise, you would , perhaps, expect current UK Gilts to fall. This is because in theory, there are better investment returns elsewhere, for example from Gilts offering higher interest payments. As interest rates rise, the assumption is that the price of existing UK Gilts will fall.
· The bond market is driven by macroeconomic factors such as inflation expectations, central bank policies, and global economic growth.
Please note, all trading involves risk, clients can lose money as well as win. Risk Management.
Risks associated with trading with APM Markets
Leveraged Product: As this is a leveraged product there is a risk of losing all your account balance: (Please refer to Trading with Leverage section)
Margin Close Out: In the event that your total account value drops below 50% of the required margin this will lead to a Stop Out, meaning your trade will be closed by APM markets. (Please refer to Trading with Leverage section)
Slippage: This occurs when a market gaps either higher or lower. (Please refer to Basics of Trading section)