No time to trade Shares? Think again!

Many of those who want to trade the financial markets feel that they have neither the time nor the head space to do so. However, in today’s world this need not be the case. Thanks to online trading platforms, investors can access the global financial markets with ease at any time of day (or night).

It’s for that reason, not to mention the fact that savings accounts yield virtually nothing these days, that more and more people are taking the decision to manage their own investments in their spare time.

There’s a common misconception that trading involves staring at a screen for hours on end, but this simply isn’t true anymore. It just depends on which instrument you are trading. Blue Chip equities such as those in the UK 100 are less volatile than, say, FX/Currencies, with positions needing much less ‘babysitting.’

With numerous execution-only and advisory brokers out there, all offering a slightly different service, it can be tough to find the right one – that lets you pursue your particular objectives in the most cost-effective and convenient way. But what would the service consist of that would be best for someone who wants to either dip their toes into the markets for the first time, or simply trade the markets in their spare time?

Business by day, Stocks by night

With the Earth spinning on its axis, it’s always daytime somewhere! There are myriad markets that can be traded outside of UK hours. The FX markets do of course trade 24 hours a day, 5 days a week, but the main US stock markets trade until 9pm UK time every weekday, and Far Eastern shares trade thereafter. What’s more, the major global equity indices are accessible 24 hours a day for those that trade Contracts for Difference (CFDs).

Through modern trading platforms investors can place orders to open positions in their absence. Thus, if trading the UK markets, one is able to do all of the preparatory work in the evening and let the online platform do the rest the next day. In this way, the world’s financial markets become accessible to everyone at all times.

Information is king

Research is the processing of information and, of course, it’s not only needed pre-trade. Trade monitoring takes time and energy too. Nowadays the right broker will be able to do this on your behalf with a small number currently providing clients with a dedicated account manager. It’s their job to watch the markets and their clients’ positions all day, every day.

Naturally, this is one of the two key things offered by Accendo Markets. We aim to keep our clients abreast of all the relevant market-moving information, leaving them free to go about their daily business in the knowledge their investments are receiving the attention they need.

Our daily research publications such as the Morning Report and Index Focus aim to prepare clients for the day ahead. Our Macro Calendar is sent out daily and details the next day’s market-moving data releases. Our Weekly Newsletter and Week in Advance publications are simple to digest and prepare clients for the week ahead. We’re all about pro-action, not re-action.

Don’t take our word for it. Trial our research here for two weeks. When the time’s up, you’ll simply stop getting it. (Simple). Read on for an example of how the Accendo platform could benefit your trading endeavours.

An example: Vodafone (VOD)

Say Vodafone shares have a strong week on the back of a good earnings update. After looking at a price chart for Vodafone, an investor might decide that the shares look attractive at 225p, 10p below the current level. Using a CFD trading platform she can set an order to buy in at that set price or better.

It might happen in a day. It might happen in a week or a month – it may never happen. There is no time hindrance. Likewise, if the investor is only looking to bank a 20p profit from her Vodafone position she can enter a profit-taking order that will only execute when Vodafone shares have risen by 20p. That way if her position reaches her objective, she can be confident that the trading platform will automatically crystallise her profits at the pre-determined level, even while she is tied up in that important meeting.

Furthermore, to mitigate risk she can set a get-out level (known as a stop-loss) that will close the position at a level that would, if the trade went wrong, prevent losses exceeding what she is comfortable with. If she took out a £20K position in VOD with a CFD, risking £1,000 in the hope of booking profits of £2,500, she can use the platform to make sure that losses never exceed £1,000 and that profits of £2,500 are booked as soon as they are reached.

Being able to set up every parameter of a trade – entry, stop loss & profit limit - out of hours saves you having to monitor your positions. It frees you up to run your business whilst still being able to pursue your goals of generating additional returns from the stock markets. We will provide all the information you need to take a view by highlighting and analysing coming events in advance.

Keeping you informed – a Week in Advance

Our Week in Advance publication is essential for traders who need to know which companies are reporting and when. Deceptively simple in its appearance, it’s the only way to get prepared for what’s coming in the following 7 days. Once we know what your interests are, we’ll be able to send you more details in the form of earnings previews and analyst recommendations. Earnings previews are released the day before results and detail what analysts in the city are forecasting, while analyst recommendations are constantly being revised and updated.

As all reputable brokers should, Accendo highlights key company events and economic data releases ahead of time. That’s great, but most brokers leave it there. Accendo goes the extra mile to provide you with earnings previews and analyst recommendations for all stocks that trade on the London Stock Exchange. If it’s on the financial terminal Bloomberg, it’s available to you.

Earnings preview example

Figure 2: Earnings preview for house builder Persimmon, straight from the Bloomberg Terminal. These are available to all our clients the day before results (Source: Bloomberg, 23 Aug).

If a trader was interested in UK housebuilders, she would have been sent the above earnings preview the day before Persimmon reported. The trader’s account manager would also have sent through a full rundown of views on the stock with all of the most recent analyst recommendations for Persimmon (see overleaf).

From this information the trader could take a view on Persimmon shares and instruct the platform to open a position in Persimmon the following morning. All of this can be done out of market hours, with no impact on the trader’s day-to-day business activities.

Analyst recommendations

Analyst recommendations are key for gauging what the market as a whole thinks of a stock. The above screenshot brings together a number of essential observations. It tells you the extent to which city analysts are bullish or bearish, the potential 12-month return and how the current share price compares to the average target price. In the above example, brokers are neutral-to-bullish on Persimmon shares. However, the current share price is actually above the average 12-month target price. Could upgrades be on the way?

Most importantly, these analysts are not revising their ratings and target prices every five seconds! In similar vein, traders need not be monitoring their positions constantly, or even looking for ‘the optimum entry point,’ if everything is set up beforehand.

Now, where can one find the right platform and the right product?

Not surprisingly, both are part of the service offered by us here at Accendo. We are an execution-only broker with a personalised service. Our aim is to provide you with a platform that will allow you to trade what you want, when you want, and a dedicated account manager to keep an eye on the markets for you. We specialise in CFDs (contracts for difference), a flexible and widely traded alternative to traditional shares that is currently exempt from UK stamp duty (as at 22 Aug 2016).

CFDs: Like shares, but more flexible

CFDs are leveraged instruments, but you don’t have to use the leverage

If you had, say, £10,000 to invest in the stock market, you could deposit that amount into a share dealing account and purchase shares in a company. You would pay commission to open the position, 0.5% in stamp duty and the full £10,000 will be tied up in your chosen shares with any profit or loss based on that exposure.

The same £10,000 worth of exposure can be secured with a CFD for a fraction of the initial outlay thanks to leverage, with the risk and reward the same as if £10,000 worth of traditional shares were held. But should you not be interested in leverage, you can always treat CFDs like shares. Simply deposit £10,000 into a CFD trading account and take the equivalent CFD position which will tie up just £500 (note that overnight financing costs will still apply). The remaining £9,500 is not tied up, so you can use some of that to take advantage of another short-term opportunity elsewhere, or simply leave it on the account to support any losses. Best of all, using a CFD means you pay no stamp duty.

What’s your view?

Think shares will rise? Take a long position by buying CFDs (buy low, aiming to sell high). Think they’ll fall? Take a short position by selling CFDs (sell high, aiming to buy low). For a more detailed rundown of CFDs and how they compare to traditional shares in terms of mechanics, associated costs and some trading scenarios click here.

The Accendo Approach

We don’t believe that talking only about profits is giving a good service, but we do think that communicating with you is a good thing! At Accendo Markets every trading decision is yours - it’s your call whether you buy or sell. Our aim is to provide you with the best platform in the business and a comprehensive research offering. We also aim to provide any help you need by highlighting opportunities which may be profitable to you, the investor. Access our no-nonsense research to see for yourself.