Stocks
Stocks, also known as equities, are shares of ownership that entitle the holder to a part of a company's assets and earnings. The stock market is where these shares are bought and sold. There are 60 major stock exchanges around the world and 16 of them each have a market capitalization of over $1 trillion. Both large players like banks or hedge funds and small investors participate in this market. The stock market operates on a system of supply and demand and has opportunities for long term investors and for day traders.
The US stock market contains well-known exchanges such as the NASDAQ Stock Market and the New York Stock Exchange. They have a reputation for trading strong, high-quality securities and feature some of the world's most actively traded companies such as Apple, Amazon, Bank of America, General Electric, ExxonMobil and Johnson & Johnson. One of our most popular chats is the Stocks chat where traders talk in real-time about where US stocks are going.
IC Broker single stock CFDs give traders the ability to trade the world’s most popular companies such as Apple, Facebook or BHP Billiton.
We’ve listed the most popular stocks across the Australian and US markets to give you the best trading opportunities. Alternatively you can trade global macro themes with our special selection of US Exchange listed CFDs including a range of emerging markets Indices and popular such as the VanEck Vectors Gold Miners (GDX).
Stocks are available exclusively on the IC Broker platform which offers advanced functionalities for both new and experienced traders who require world class execution and superior charting tools.
Stocks
Facts
How does Stock CFD Trading work?
Stock trading involves buying or selling a share of ownership in an individual company listed on an exchange such as the ASX or NASDAQ. Stocks are typically traded without leverage and through a stock exchange. Stock CFDs however can be traded using leverage and are done so over-the-counter (OTC). Participants are able to access stocks of individual companies, building positions in an individual company or in a specified sector of the economy.
Participants often build strategies with diversification in mind to diversify away unsystematic risk across a number of companies or a range of sectors. Investors may choose to build positions in defensives if they are predicting volatility. Similarly, investors may decide to build a portfolio around a growth strategy consisting of small to mid-cap technology stocks.
Stocks trading example
The gross profit on your trade is calculated as follows:
Opening Price
$152 x 100 shares = USD $15,200
Closing Price
$170 x 100 shares = USD $17,000
Gross Profit on Trade
USD $17,000 - $15,200 = $1,800
Opening the Position
Apple is trading at 150/152 and you are of the view that Apple’s latest product release will boost sales. You decide to purchase 100 shares of AAPL. For each contract, one point (a price movement of 1) is equal to $1 USD.
With 100 contracts, every point that the bid quote on AAPL rises above 152 you will make a profit of $100 USD, and for every point the bid quote falls below 152 you will lose $100 USD.
Closing the Position
1 month later, after sales results are released, the price of AAPL has increased to 170/172 and you decide to take profit by selling 100 AAPL Stock CFD contracts.
To calculate the net profit you must include any financing or dividend adjustments. In the case of a ‘long’ position interest is credited and in the case of a ‘short’ position interest is debited.
*US STOCK TRADING
The US Internal Revenue Service (IRS) requires all non-US resident holders of US equity derivatives – (this includes CFDs ) to be taxed on dividend adjustments.
When trading any US listed equities with IC Broker, the Dividend adjustments on your long positions are credited to your account, and the applicable withholding taxes are automatically deducted.
The deduction rate varies depending on the underlying market.
If you are an INDIVIDUAL and want the applicable reduced rate, please fill out "Form W-8BEN" and upload it to your Client Area.
If you are an ENTITY and want the applicable reduced rate, please fill out "Form W-8BEN-E" and upload it to your Client Area.
For further information please do not hesitate to contact our Support Team