CFDs _ CFD trading - ONE CFD

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CFDs _ CFD trading - ONE CFD Powered By Docstoc
					ONE CFD
Contracts for Difference have    ‘CFDs’ have added a new dimension             not suitable for everyone and we ask
                                 in flexibility and market coverage for        you to take a few moments to read
revolutionised the private
                                 professional and non-professional             through this brochure and ensure you
and institutional investment     traders alike; One Financial can truly        understand the risks associated with
markets in the last few years.   claim to be a pioneer in the retail CFD       CFD trading before you proceed.
                                 market and we continue to embrace
                                 new markets which are not always              Trading with One Financial’s ground
                                 made available by our competitors.            breaking online trading platform
                                                                               offers the most flexible and efficient
                                 As a leveraged product, CFD trading           investment service available in today’s
                                 can result in significant profits or losses   market. Through a simple ‘buy’ or
                                 beyond the initial investment; this           ‘sell’ instruction, you can enter or
                                 exposure to a higher degree of risk is        exit the market, immediately.
Introducing CFDs

A Contract for Difference is an                or broker fees – using CFDs can             Contracts for Difference are a very flexible
agreement to exchange the difference           eliminate these costs and increase your     means of trading, especially due to the
between the opening and closing                overall profitability and the efficiency    ability to ‘go short’ in a market - this is
price of a contract, multiplied by the         of your investment strategy.                particularly applicable to equity CFDs.
underlying volume of that contract.
                                               Many CFD contracts will not have a          Traders are also able to benefit from
Unlike many traditional markets, CFDs          fixed expiry date unless the underlying     the ability to trade baskets of shares
offer the added flexibility of allowing        market (for example a commodity             or commodities, or share indices.
traders to go short in a stock or              Futures contract) has an expiry
commodity they do not already own.             date. This means you can keep your          Trading CFDs with One Financial also
                                               position open, add to it or reduce your     provides investors with immediate
CFDs also offer the advantage of               exposure, as the market evolves and         execution – there is no ‘call back’ with
trading on margin, which means                 you refine your trading profiles, without   confirmation that the order to your
traders only have to deposit a small           being under any time pressure.              Stockbroker or Futures Broker has
percentage of the underlying value of                                                      been filled and when you click ‘buy’ or
the positions they wish to trade. This         Where CFDs differ from traditional          ‘sell’ your order is filled at that price.
significantly increases the profit (or loss)   investments, such as buying equities,
potential, which means only investors          is that there is no physical delivery of    The latest details of all the markets,
who are fully conversant with the              the underlying investment. By buying a      spreads, values and terms for
market should consider using CFDs.             CFD, you are investing in the expectation   each Contract we offer is always
                                               that the price of the underlying market     available on our website.
Often, share investing may incur               is going to rise; you do not actually
stamp duty charges, whilst commodity           own any of the underlying shares or
trading may leave you with Exchange            commodity that the price is quoted on.

          HOW DO CFDS WORK ?
    The underlying process of CFD              Example Calculations:
    trading is extremely simple.
                                               Trading US Crude Oil
    However, as we have stated, it also
    carries a high element of risk and for     A One Financial Crude Oil CFD is set to a contract size of 00 barrels; this translates
    this reason it is important to take time   to a tick value of $ and carries a margin requirement of 3% of the contract value.
    out to understand exactly how CFD’s
                                               US Crude Oil is trading at $69.50/54 and you believe
    work, what those risks are and how
                                               that the price of Oil will continue to rise.
    they can be managed and reduced so
    that you maximise your profit potential    You buy                    0 CFDs                (000 barrels)
    and minimise your downside risk.
                                               Market exposure            $0 x 6954                 = $69,540
    As we have said, with CFD’s you            Margin Requirement         $69,540 x 3%                 = $,086
    trade a number of Contracts, each
                                               Later the price has moved to $69.79/83 and you decide to
    one having a pre-set specific value or
                                               close your position and realise the profit on the trade.
    reference to the underlying market.
                                               You bought at              $69.54
                                               You sold at                $69.79
                                               Profit                     (Sold – Bought) x No. of CFDs
                                                                          25 x $10 = $250

                                                                                 Once you have opened your long
In the example below, suppose we believe the Euro is going to weaken
                                                                                 or short position, your account will
against the Dollar and we want to take advantage of this move:
                                                                                 be debited with the initial margin
A One Financial EURUSD CFD is set at a contract size of 0,000 EUR; this         required to take that trade.
again translates to a tick value of $ and carries a margin requirement of %.
                                                                                 If you close the position before the end
EURUSD is trading at .3400 and you sell 00,000 Euros (0 CFDs).                of day, your account will be credited (or
                                                                                 debited) with the profit (or loss) associated
You sell                   00,000 EUR                                           with your trade. However, you may wish
Market Exposure            00,000 EUR x .34        = $34,000                  to run with your position open into the
                                                                                 next trading day. In this case, we will
Margin Requirement         $34,000 x %                = $,340
                                                                                 ‘mark to market’ your open position at
The market moves in your favour and you buy back 00,000 EUR at .3350           the close of business, credit (or debit)
                                                                                 your profit (or loss) and re-open your
You sold at                .3400                                                position at the start of the new day.
You bought at              .3350
                                                                                 There is no additional charge for this,
Profit                     (Sold – Bought) x No. of CFDs
                                                                                 although you may incur financing fees
                           50 x $10 = $500                                       for the cost of holding your position
                                                                                 overnight. This basically reflects the
Alternatively you can look at the notional value of the contracts traded:
                                                                                 cost to One Financial of funding your
You received $34,000 on the initial transaction and paid out                    leveraged position on an overnight basis.
$33,500 to close the position (00,000 EUR x .3350).

The profit on the trade is therefore $500 ($34,000 - $33,500).

    One Financial offers one of the   As the market’s leading commodity              As a company responsive to its client’s
                                      specialists, we provide a series of energy     needs, One Financial looks to provide
    most comprehensive suites of
                                      CFDs not typically available elsewhere.        services which reflect our claim to be
    products and markets tailored                                                    leaders in the CFD market. To learn
                                      If you do not see a particular market
    to your requirements.                                                            more about the unique contracts we
                                      listed on your trading platform, please        have already launched or to find out how
                                      contact us and if we can offer it, we          we can tailor a contract to your specific
                                      will (subject to volume demand).               needs, please contact our Help Desk or
                                                                                     visit our website at
                                      One Financial’s Unique Products
                                                                                     Below we have set out the Markets
                                      As a pioneering CFD provider, One              we offer:
                                      Financial is able to offer a series of
                                      contracts which are unique to our              Global Markets
                                      company. These may include ‘basket’
                                      CFDs which are composites made from of         -   Energies
                                      a selection of underlying futures contracts.   -   Metals
                                      For example, our One Financial Energy
                                                                                     -   Bullion
                                      CFD represents a basket of Oil, Gas
                                      and Electricity futures contracts, made        -   Forex
                                      from a fixed percentage configuration.         -   Softs

                                      Reflecting the benefits of working with        -   Indices
                                      an innovative market leading company
                                      like One Financial, both Clients and           US Markets
                                      Partners can benefit from our unique
                                      services. Clients may, subject to volume,      -   leading US stocks
                                      request us to configure a particular           -   key US Stock Indices
                                      contract made up from a basket of
                                      underlying contracts of their choice.          For a full listing of our product
                                      Partners may also benefit by asking One        specifications and Contract terms,
                                      Financial to offer a multi-component           please visit our website for the most up
                                      CFD, branded with their own name.              to date listings.

One Financial is proud to       Through our extensive and longstanding
                                trusted contacts in the Islamic financial
be at the forefront of UK
                                world, we have tailored a Sharia
CFD firms which really          Compliant service which we are able
understand and respond to the   to offer to discerning Clients who wish
                                to take advantage of this facility.
growing need for truly Sharia
compliant CFD trading.          Sharia Compliant Trading through One
                                Financial is subject to status and additional
                                terms and conditions - please speak to
                                your account representative for
                                further information.

    Why place orders?                               One Financial is pleased to be able           filled at the market opening price if the
                                                    to offer the most advanced Order              market gaps through your order during
    One Financial does not just provide             execution facilities on the market today.     the market break. This may result in your
    an execution facility for traders                                                             order being filled at a more profitable
    – we look to equip our clients with a           What types of order can I use?                price than your predefined level.
    full range of services and facilities in
    order to support our clients’ trading           Stop Orders                                   One Cancels Other Orders - OCO
    intentions and empower them with                A stop order is an order to execute a         OCO stands for One Cancels the Other
    full control over their trading.                trade at a price that is inferior to the      Order. This order is a combination
                                                    current market price. These can be            of two orders whereby the execution
    Our online platform is configured               used to open a new position or close a        or cancellation of one of these orders
    with the following Order facilities:            losing position. You can place either a       automatically cancels the other. If you
                                                    Sell Stop to execute below the current        have a position in the market your OCO
      Stop Orders
                                                    market price or a Buy Stop that executes      orders could be a combination of a limit
      Limit Orders
                                                    above the current market price. Orders        and a stop to close out that position at
      OCO Orders                                    can be placed outside the product             predetermined levels either side of the
      Guaranteed Stop Orders                        trading hours when the One Financial          current market price. Alternatively if
      Good ‘till Cancelled Orders                   Dealing desk is open however orders           you have no positions in the market you
      Good for the Day Orders                       will be filled at the market opening price    can link a buy stop above the market
                                                    if the market gaps through your order         and a sell stop below the market to take
    One Financial strongly recommend                during the market break. This may             advantage of any trend break outs.
    clients take advantage of these facilities.     result in your order being filled at an
                                                    inferior price to your predefined level.      Guaranteed Stop Orders - GSOs
    Clients with open positions can place
    a Stop Loss Order which will protect                                                          There can be times when the market
                                                    Limit Orders
    their positions against adverse market                                                        gaps and misses the level at which your
                                                    A limit order is an order to execute a        stop order was placed. In this event it is
    movements, without having to watch
                                                    trade at a price that is superior to the      common practice for your order to be
    the market constantly or close out a
                                                    current market price. These can be used       ‘slipped’ and filled at the next traded
    position early due to time constraints.
                                                    to open a new position or to take profit on   price in the market; this will always be
    Clients who are waiting for the market          a winning position. You can place either      at a worse price than your initial order.
    to reach their chosen level can place           a Sell limit to execute above the current     One Financial’s GSO Orders guarantee
    a Market Order to enter the market              market price or a Buy limit that executes     a fill at the price requested by the client,
    when it reaches their target price.             below the current market price. Orders        during market opening hours, even in
                                                    can be placed outside the product trading     the event the market gaps through the
    These twin issues – control and flexibility –   hours when the One Financial Dealing          order price. Please note, the provision
    are key to successful trading and               desk is open, however orders will be          of this service is subject to status.

Good ‘till Cancelled – GTC                     How do I place an order?                   How do I cancel or amend an order?
These are orders that will remain active
                                               Placing an order is fast and simple with   Cancelling or changing placed orders
until they are either cancelled or executed.
                                               order tickets accessed directly from       follows the same process required
Good for the Day – Day                         the product bar. Alternatively if you      in placing the initial order.
                                               are trading using our one click dealing
These are orders that will remain active
                                               hot keys, linked orders can be attached
until they are executed or until the
                                               once the trade has been confirmed.
settlement time is reached whereby
they will be cancelled automatically.

    Risk:                                             margin requirements, to support                receipt of documentation and once
                                                      our client’s trading needs.                    your account has been credited with
    Q: What is the risk of trading                                                                   sufficient funds, you can begin trading.
       with One Financial?                         Dividends, takeovers & voting rights:
                                                                                                  Q: Can I start trading before my
    A: There are several risks you should
                                                   Q: What is One Financial’s policy                 funds arrive at One Financial?
       consider before opening an
                                                      on corporate events?
       account with One Financial:
                                                                                                  A: One Financial does not provide
       - Contracts for Difference and              A: Client’s accounts will be adjusted             credit facilities for new clients.
            margined derivative instruments           to reflect any corporate event
            are inherently risky and are not          that affects the Equities or Indices        Account funding:
            suitable for all investors. You           they may be holding. Due to the
                                                      nature of CFDs, clients will not            Q: How do I fund my One
            should familiarise yourself with
                                                      receive dividends in the same way              Financial account?
            the products and services we
            provide before entering into any          shareholders would. For Equities,
                                                                                                  A: All accounts must be funded by
            contracts with us. Full explanations      a dividend adjustment is credited
                                                                                                     electronic bank transfer of funds.
            on our products and how they              to long CFD positions and debited
            operate are available. Please             from short CFD positions held at the        Q: What currencies do you accept?
            contact us either directly or via         close of business on the day before
                                                      the ex-dividend date. The same              A: Accounts are denominated in USD;
            our website to find out more.
                                                      principle applies for Indices to reflect       we accept USD, STG and Euro
       - Failure to manage your account                                                              transfers and will exchange any non-
                                                      the fact that the Index will drop as its
         may result in you losing more                                                               USD receipts at our daily Company
                                                      constituent members go ex-dividend.
         than your initial investment. One                                                           rate to convert your funds into USD
         Financial provides numerous levels           In the event of rights or script issues
         of support to assist your trading            and splits One Financial will adjust        Fees and charges:
         including a comprehensive suite              open positions in proportion to the
                                                                                                  Q: What fees does One Financial charge?
         of Order services which enable               clients exposure in the underlying
         you to better manage your risk.              market, such that the contract              A: Clients will pay a commission rate
       - As with any investment activity,             value remains unchanged.                       commensurate with the level of
         you should be confident when                                                                service they receive and the level
                                                      For mergers and takeovers One
         remitting your money that the                                                               of commissions which may apply
                                                      Financial will terminate the Equity
         recipient firm is reputable and                                                             to their country of domicile. The
                                                      and close all positions held at
         trustworthy. One Financial is                                                               commission rate is agreed with
                                                      close on the effective date.
         Authorised and Regulated by the                                                             you when you open an account
         Financial Services Authority for the      Account opening:                                  and a note of this is made in your
         conduct of Investment Business and                                                          account opening documentation.
         we must submit to the rules and           Q: How do I open an account?
         requirements of the FSA at all times.                                                    Q: Are there any other charges?
                                                   A: Account application forms are available
    Margin:                                           in our Client Agreement brochure or         A: Open positions held overnight will
                                                      can be downloaded from our website.            attract finance fees which will be
    Q: What are the margin requirements               Applicants will need to complete the           debited or credited (as applicable)
       for One Financial products?                    form in full and send this, together           to your account at the close of day.
                                                      with the requisite ID documentation,
    A: Margin requirements vary by product;                                                       Q: Is it possible to have a ‘non-
                                                      to our Head Office in London.
       please refer to the Products section                                                          interest’ account?
       of our website for up to the minute         Q: Can I apply online and start
       information on all of our products,                                                        A: Yes, One Financial is one of the
                                                      trading straight away?
       including margin requirements.                                                                few firms who are able to offer
                                                   A: You can download the forms online              Sharia compliant accounts. This is
       One Financial believes strongly                but we must receive your application           subject to status and certain terms
       in providing client service and                and verify your ID before accepting            and conditions. Please contact our
       for this reason we will always try             you as a client. Ordinarily, this process      Helpdesk for further information.
       and offer a flexible approach to               will take less than one day from

One Financial is an execution-only       more than your initial deposit. Trading      for identifying the requirements of your
market-maker in financial derivatives,   Contracts for Difference may not             local laws and regulations and to ensure
in particular Contracts for Difference   be suitable for all investors and you        you are not in breach thereof. One
(CFDs) on commodities, shares and        should fully understand the risks            Financial is authorised and regulated
stock indices, as well as margined       involved before opening an account.          by the Financial Services Authority
Foreign Exchange. We serve private
investors, brokers, trading houses,      The information given in our brochures       One Financial is operated by CB Financial
corporates and fund managers.            is not directed at or to be distributed      Services Limited, a company registered
                                         to any persons domiciled in the United       in England at St Pauls House, Warwick
Contracts for Difference and margined    States or any other jurisdiction where       Lane, London EC4M 7BP and Company
Foreign Exchange are leveraged           its distribution or the services described   Registration Number 6050593.
products which carry a high degree       herein may be contrary to local laws or
of risk which may result in you losing   regulations. You shall be responsible
One Financial
One Lyric Square
London W6 0NB
United Kingdom

email One Financial:
call One Financial:    + 44 (0) 203 008 4817
fax One Financial:     + 44 (0) 203 008 4818

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