To trade shares you can either use a traditional stock brokerage firm (such as IG) or you can use a CFD service, such as AvaTrade We'll explore the pros and cons of both approaches in a moment.
Currently, IG charge a minimum of £5* per trade for buying and selling shares online, while AvaTrade charge 0.4 above the spreadThe spread is the difference (in pips) between the buy price and the sell price.
Example: If the current buy price of EURUSD is 1.0004 and the sell price is 1.0003, there is a 1 pip spread. for stocks such as BARC
Pros & Cons of Trading Barclays Shares (BARC) as a CFD
A CFD (or 'contract for difference') is a way of trading instruments like shares without having to own the shares. Here are some of the pros and cons of CFD trading compared to using a traditional stock brokerage.
- The main advantage of a CFD broker is the leverage they offer their clients. This means that a trader would require a much smaller account sizes relative to the size of a trade in comparison to a traditional share dealing broker.
For example, offer leverage of 1:10 on Barclays shares. This means that at the current price of £208.95 per share, to buy 100 Barclays shares with no leverage, it would cost a total of £20,895. However, using leverage of 1:10 , a trader would only require an account size of £2,090 to place the trade with a CFD broker like AvaTrade
- CFD brokers allow traders to go long or short, which means a trader could benefit from rising and falling markets.
- CFD brokers usually do not charge a commission and instead have their fees included in the spread.
- CFD brokers like AvaTrade that offer the MT4 platform, allow clients to use expert advisors to automate their trading strategies.
- UK shares that are purchased as a CFD are not liable for the usual 0.5% stamp duty payable with a traditional share purchase (please note that tax laws can change and are subject to individual circumstances).
- Unlike traditional brokerages that only offer stock trading, CFD brokers like AvaTrade give access to a wide variety of instruments like stocks, commodities and currencies.
- As mentioned, leverage is a double-edged sword that can magnify both gains and losses. And as with all trading, traders are at the risk of the markets moving against them.
- CFD brokers typically charge an overnight fee for holding a long position overnight. This is essentially the cost of borrowing the money from the broker to purchase the shares on margin. There would be no overnight fee if you closed the position on the same trading day. Therefore, this would only be a disadvantage if you are not a day trader or intraday trader.
For example, AvaTrade currently charge an overnight financing fee of 2.50% for individual equities. This means that for the example trade above, it would cost a trader £1.43 every day the position was open.
For further information on trading stocks as a CFD, visit out "trading stocks as a CFD page". It is important to remember leverage can work both ways and magnify gains and losses.
*All information collected from http://www.avatrade.co.uk/, see website for full terms and conditions. Your capital is at risk. Last updated on 20th March, 2017.
Barclays: Key Stats & Background Information
Barclaysshares are currently priced at
£208.95, after opening the day at
£210.00. As of
17,034 million shares available, bringing their market capMarketing capitalisation is the value of a publicly traded company, calculated by multiplying the current share price by the total number of shares available. to
This market cap makes Barclays the 18th largest stock on the FTSE 100 index by market capitalisation. In the past 30 days, the Barclays share price has increased by 3.03%, from £202.80. In the past 90 days, it has ' ; decreased by -1.55%, from £212.25 to the current price of £208.95.
In terms of trading activity Barclays is the 4th most actively traded stock in the FTSE100, with an average of 12,930,902 shares being traded per day.
Barclays had a profitafter tax for the financial year ending 31/12/2016of £2,237 million, an increase from a loss of -£3 million for the financial year ending 31/12/2015, an overall 74667% change in profit after tax.
Barclays was listed on the London Stock Exchange on
November 1, 1953, and can be traded on Monday-Friday between 8am and 4.30pm GMT (UK time).
Barclays paid a dividend of 4.50p in 2016, a decerease from 6.50p in 2015.
Top 10 FTSE 100 Companies by Trading Volume
|Lloyds Banking Group PLC||84,246,052|
|Vodafone Group plc||26,379,538|
|BT Group plc||8,268,204|
|HSBC Holdings plc||7,313,551|
Top 10 FTSE 100 Companies by Market Cap
|Royal Dutch Shell Plc||£203,754,618,119|
|HSBC Holdings plc||£150,449,916,317|
|British American Tobacco plc||£98,760,047,293|
|BHP Billiton plc||£78,162,482,178|
|Rio Tinto plc||£64,459,487,212|
|Vodafone Group plc||£59,158,816,970|
Comparison of Barclays's EPS & P/E Ratio with other Banking companies
Barclays has a price/earnings ratio of 24.03. For comparison, Lloyds Banking Group's P/E ratio is 21.56 and HSBC Holdings's P/E ratio is 126.57. Barclays's basic earning per share from continuing operations for the 31/12/2016 financial year was 9.30p, which was a decrease from the previous financial year of 42.54p.
|Company||Basic - EPS||P/E Ratio||Market Cap (Million)|
|Barclays ( LON:BARC)||9.30p||24.03||£35,592|
|Lloyds Banking Group ( LON:LLOY)||2.90||21.56||£48,253|
|HSBC Holdings ( LON:HSBA)||5.19||126.57||£150,430|
*Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed.
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