There are several methods to trade the stocks of companies that are publicly listed. Buying the stocks directly is one option but that requires considerable capital investment. When you buy and sell the actual stocks, you are purchasing a small amount of the ownership of a company that is publicly listed at prices that are set by the market. Usually the objective is to profit by selling later at a higher price, which requires good judgement and timing. Some stocks also pay dividends, which delivers an income stream. The difference in online trading is that you do not buy or sell the actual company stock. Online trading is an agreement between two parties that allows traders to speculate on stock price movements without having to own the stock. It can also be applied to currencies or indices. You either pay out or receive the benefit of a price difference calculated from the date the agreement was taken out.
Leveraging is based on the margin requirement. Therefore, for a stock, a margin of 5% means your capital outlay is only 5% of the actual cost of buying the stock. Therefore, you could obtain exposure to twenty times the amount of stock than an actual stock buyer could. For example, say the price of Google stock is $400 and you buy 5, then the capital outlay is 400 x 5 = $2000. By comparison, suppose the margin for Alphabet was 10% then you could buy 5 of those for just 10% of that $2000 = $200. The effect of this leveraging on a margin of 10% would be 10+ times the return or the loss compared with holding the actual stocks. Because trading on a margin effectively means that your broker is lending you money, online trading attracts finance charges. That is not the case with direct trading in the stock itself.
Online trading providers also try to emulate the annual dividends that some stocks pay put. They credit holders of long positions (buy contracts) with what they call “dividend adjustments”).
To check all the trading information, follow the guideline below:1. Open theProuFX trading platform
2. Select the required asset and click on the Information
Check the ProuFX General Trading Conditions