RISK WARNING NOTICE
Before trading Contracts for Difference, Spread Bets or Foreign Exchange (ForEx or FX), ensure you fully understand the risks involved. These products may not be suitable for all types of investor. Trading in Contracts for Difference / Spread bets / FX carries a high degree of risk and is generally considered suitable only for the more experienced investor. Leveraged products carry a high degree of risk for your capital, and in some circumstances you may be liable for a greater sum than your initial capital invested. Past performance is not necessarily a guide to future performance. Seek independent financial advice if necessary. These products are suitable only for people over the age of 18. Information and analysis produced by Pretium Securities Ltd does not constitute a recommendation or offer to make a transaction in any derivatives or securities, and is intended to be general in nature. Pretium Securities Ltd is fully authorised and regulated by the Financial Services Authority.
The past performance of any investment is not necessarily a guide to future performance. The value of shares or income from them may go down as well as up. The value of shares may rise as well as fall due to the volatility of world markets, economic conditions/data and/or changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. If you are in any doubt about investment, you should seek independent financial advice
After weighing up the vast array of investment vehicles available, Pretium Commodities specialises in using CFDs to execute its trading strategies. This method suits our style for a number of reasons:
Simplicity
CFDs allow us to speculate on both the upside and downside quickly and simply. We don't have to trade directly in the underlying indices or buy bonds outright. We don't have to buy or sell commodity futures or trade options. We can also use CFDs for FX trading.
Speed
Due to the often short-term nature of our trades we do not want to be hampered by settlement times as required by conventional direct investment in the underlying asset. Trade execution is confirmed in seconds. Sometimes breaking data may mean we may want to open and close a position in less than 5 minutes and this is possible with CFDs.
Minimum Outlay
We want to make our clients’ funds work as effectively as possible. CFDs are a leveraged investment tool and as such allow an investor to deposit as little as 1% of the contract value. (Please note that our initial minimum margin is 20% for all products except FX which is 10%). This frees up capital and allows us to maximise returns on the amount invested. We also want to limit downside risk by using this leverage sensibly and employing a strategy that takes into account the volatility of each market traded. Stop orders are also employed to manage and limit these risks.
Lower Costs
CFDs are not liable to stamp duty, allowing much easier "real" breakevens. Commission charges are also lower than those incurred when trading traditional shares.
