The stock market was developed a very long time ago. It was one of the first financial sectors available to retail traders and investors. The situation has changed over the past decades, and the foreign exchange market has come to the fore. During the pandemic, the increased volatility and driving ranges have involved many clients, so the interest in the stock market has grown. Metadoro offers a wide range of trading instruments to clients. Let's take a look at what this company provides.
How do People Trade with Stock Instruments in Metadoro?
For a long time, it was possible to trade stock instruments only via particular brokers connected to the stock exchanges. It was not the most convenient way for many traders because those financial companies began to use contracts for differences in value. What does such a contract mean?
CFD is a contract developed for trading various assets without connecting to the appropriate site. A trader can transact with currencies, shares of different regions, indices, and other assets via one terminal. A CFD does not involve the delivery of the basic asset — it is simply an opportunity to earn on the difference in value. Such a process explains the name of these contracts. The movement of CFDs is identical to the movement of the value of the basic asset. For example, index CFDs usually involve trading the nearest futures.
If the value of an asset grows, then the cost of CFDs on this asset increases in parallel. The same thing happens during the decline. The contract implies the presence of a spread — the purchase price is higher than the sale price. It can be explained: in the stock market, the Order Book concept consists of orders above and below the current price. Accordingly, it is necessary to cover a specific price range to ensure an average level of liquidity. We have studied in Metadoro reviews that the spreads for the instruments offered correspond to the industry average. At the same time, commissions are still low.
Stocks and Indices
Shares have been and remain the primary trading instruments if you look at them in general. Securities within the framework of CFDs do not differ from ordinary ones because dividends are declared daily when buying shares. The calculation is based on quarterly or annual dividends divided by the days between payments. The same applies to indices — they also involve payments. Metadoro customers can do the following things:
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Buy securities for long-term investment. In this case, all the advantages of conventional stock trading are retained.
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Speculate in stocks on short-term movements.
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Include stocks along with other assets in different portfolios.
The company also provides ready-made strategies, some focusing specifically on stocks. An example would be Tech Giants or dividend aristocrats, which offer a plan for investing in securities with stable dividends.
The increased interest in the stock market after the pandemic is due to the vast pouring of printed money into the markets. The total volume of additional emissions exceeded 10 trillion dollars, and a significant part of the money got to the stock sector. Thanks to this, we could see an almost instantaneous recovery of the stock market and new historical highs. Such an impulse usually increases activity for a long time. In addition, the stock market, in its current form, is also partly associated with cryptocurrencies. And they are the most volatile category of assets. This correlation is evident in the Nasdaq index, which is focused on the high-tech sector.
Bonds
Bonds are common debt obligations that are traded on the stock market. There are two main types of bonds:
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State. The government of a state issues them. These bonds usually have high reliability, but a lot also depends on the country's credit rating.
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Corporate. Large companies and corporations issue them. The average profitability is higher than that of the state ones.
Bonds have several parameters: coupon payment period, maturity date, and coupon rate. Bonds are traded on the secondary market, which is why they are available as CFDs. You can buy and sell securities and make portfolios using them. For example, a common strategy is to purchase different issuers with different yields. In this case, the portfolio is based on reliable issuers, and the rest of the volume can be taken from less reliable ones with high yields. Bonds can also act as one of the types of assets in the portfolio. They are usually classified as conservative investments, so obligations are in great demand and have high liquidity.
In 2022, there is an exciting situation that breaks all stereotypes about times of crisis. Along with stocks, bonds also fall, although they usually rise in price at such a time. Many investors go into cash, preferring to hold dollars. But at the same time, depreciated bonds will sooner or later rise above their nominal values. Therefore, many far-sighted investors buy debt obligations at a reduced price. Government bonds can be considered the most reliable instrument for investing funds, and in the current conditions, this is doubly relevant.
