What is a CFD?

Lots of newbies asked me about CFD (Contract For Difference)... I compiled it here for all to read rather than answer individually.

CFD is simply an agreement to exchange the difference in value of a particular share between the time at which a contract is opened and the time at which it is closed. It is an arrangement made in a futures contract whereby differences in settlement are made through cash payments, rather than the delivery of physical goods or securities.

CFDs are generally versatile trading vehicles, giving you full access to market movements without having to own the underlying instruments. CFPs are fast replacing traditional share dealing as the vehicle of choice for flexible, cost-efficient trading. You can trade shares, forex, stock indices and many other markets on margin. You can also trade a wide range of forex contracts, with spreads starting from as low as just 2 pips, as well as round-the-clock stock indices and a selection of other markets. All under one trading account.

Qn is To LONG or To SHORT?

CFDs are especially powerful in the BEAR markets. With CFDs you can buy or sell at the quoted price, to profit from rising or falling markets. Other methods of shorting shares are often inconvenient and expensive. CFDs can be used to trade an extremely wide range of financial products and this means they offer a way to easily start dealing across a large cross-section of the market. For example, if you have an interest in Singapore and US indexes, the level of Wall Street, and the exchange rate of the US dollar against the euro, you can deal all of these markets with one CFD provider on one account.

The new & flexible way of trading is very similar to normal share dealing in two respects. You deal at the cash price of the share, and pay a commission which is calculated as a percentage of the value of the transaction. Our standard commission rate for Singapore shares is just 0.2% (see Contract Details).

When you open a position, however, you do not have to pay for the full value of the shares. Instead you put up a deposit, from just 10% of the contract value. This means you can trade up to ten times your initial capital.

When you close your position, the difference between your opening contract value and your closing contract value is realised. So just as with buying shares or trading futures, the degree to which you are correct in your CFD trading affects how much you make or lose.

Geared products like CFDs can help you make the most effective use of your investment capital, but it is important to appreciate that the amount you could lose relative to your initial investment is greater for geared products than for non-geared products.

Merril Lynch still hold 100 million shares of Jade !!

As what I have posted this morning? That is the same Qns market watchers are asking now? Why did the BIG BOYS want to buy when Jade is declining sharply like a high falling knife? Who do you want to be? A millionaire will be in the making if you know how to ID the gem....


ML sold 100 million Jade @ $0.22 and still have 100 million. Who can absorp 100 million shares of Jade tomorrow, if ML wants to sell?


=DJ Merrill Sold Large Volume Of Jade Tech Shares Tues - Source
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SINGAPORE (Dow Jones)--Merrill Lynch & Co. (MER) sold about 100 million Jade Technologies Holdings Ltd. (530.SG) shares Tuesday, likely in a move to unload collateral pledged to it by troubled Australian broker Opes Prime Group Ltd., a person familiar with the matter said Friday.

The sale could be a blow to Jade President Anthony Soh, who had placed 295 million shares with Opes Prime to back a loan taken to fund his takeover of the Singapore-listed software company.

"The daily volume for Jade is usually a few million shares, but Tuesday it was around 196 million," the person told Dow Jones Newswires.

"Merrill sold about 50% of what went through, mostly at S$0.22 a share."

Soh Wednesday said he may not have sufficient resources to complete the S$0.225-a-share offer after Opes Prime was put into receivership with A$1 billion ($918 million) owed to creditors.

Apart from the 295 million shares, Soh continues to hold 156 million shares representing 16% of Jade, which he manages.

Merrill Lynch and Australia & New Zealand Banking Group Ltd. last week began selling shares that Opes Prime had pledged to them.

It''s unclear how many of the 295 million shares wound up with Merrill Lynch and ANZ.

Merrill Lynch said Friday that it no longer has any exposure to Opes Prime as it has sold the shares received from the broker.

Merrill Lynch couldn''t be reached for comment about the Jade share sale.

Jade last traded at S$0.22 Tuesday before trade was halted.


- Dow Jones Newswires; 65 6415 4153

JADE - A Rare Gem to Catch?

Rare opportunity to get 100% profit return easily. My gut feel that this could be a catch... qn is who is buying the big volumes sold from ML today and tomorrow?


SGX yesterday declared Catalist-listed Jade Technologies a designated security, prohibiting any selling of the shares unless the seller can show he holds sufficient quantities.


SGX said the condition was not applicable to shares that have been bought on contra, adding the designation was to ensure 'orderly trading' in the market.

Investors are fearing a heavy selldown after Jade's group president Anthony Soh pulled the plug on his takeover bid for the company on Saturday, admitting that with two-thirds of his shares in Jade pledged to a failed Australian broker, he was no longer able to guarantee sufficient funds were available to facilitate the offer.

Dr Soh yesterday confirmed in an interview with BT that the offer is under internal investigation by the Securities Industry Council. The role of OCBC Bank, which quit as financial adviser to the offeror on April 1, when the storm broke, may also be reviewed.

SGX said shareholders who had accepted the offer from Dr Soh will have their shares transferred back to their accounts today when trading resumes. Trading has been halted since Wednesday.

Early last month, Dr Soh made a 22.5 cents a share conditional offer for Jade, stating he owned about 46.5 per cent of the company. Last week, it emerged he had pledged two-thirds of his stake, or about 30.5 per cent of Jade's share capital, to Australian broker Opes Prime as security for margin loans.

But under the agreement, ownership of the shares may already have passed to Opes and when it failed, on to its secured creditors. Dr Soh and other clients of Opes claim they believed their shares had only been pledged and that they retained beneficial interest but Opes is now known to have lent those shares to banks as security for financing.

With a much smaller shareholding than thought, Dr Soh said he could not guarantee he had the extra $67 million to satisfy full acceptances of the offer.

Dr Soh told BT that Opes had operated what seemed a very attractive lending regime, providing 60 per cent credit on the value of even small cap stocks. He first pledged about 140 million Jade shares last October and had drawn down the full amount of about $25 million in loans.

When the price of Jade shares tanked in late January, Dr Soh pledged about 150 million more shares to make up the shortfall but did not borrow any more money. 'It was a very fluid arrangement but it came at a very heavy price.'

He said he suspected Opes had been lending shares to third parties after finding out in February that about 40 million of the 295.5 million shares pledged had been moved to another account. Dr Soh visited Melbourne three times in late February and early March to confront Opes's chief executive officer Laurie Emini. 'Each time he said in front of his staff that I was the beneficiary.'

Dr Soh claimed he knew of 'five to 10 other clients of Opes' in Singapore who like him had pledged shares in locally listed companies to Opes to secure financing. He is now taking part in a class action to get compensation. 'There is probably no doubt that I've lost the shares.' Dr Soh put his paper losses at about $40 million.

He said that the fundamentals of Jade have not been affected, adding he was in discussions with a Chinese buyer and a big US investment bank to come in as partners in a coal mining project in Indonesia.

A recent independent report included in the now withdrawn offer for Jade had put the value of the coal concession at about $1 billion.