To trade HSBC 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 take a fee from 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 HSBA
Pros & Cons of Trading HSBC shares (HSBA) 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.
At the current price of £657.90 per share, to buy 100 HSBC shares with no leverage, it would cost a total of £65,790. However, using leverage of 1:10 , a trader would only require an account size of £6,579 to place the trade with a CFD broker.
- 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 £4.51 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.
HSBC: Key Stats & Background Information
HSBCshares are currently priced at
£657.90, after opening the day at
£656.30. As of
20,236 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 HSBC the 3rd largest stock on the FTSE 100 index by market capitalisation. In the past 30 days, the HSBC share price has decreased by -1.45%, from £667.60. In the past 90 days, it has ' ; increased by 5.58%, from £623.10 to the current price of £657.90.
In terms of trading activity HSBC is the 15th most actively traded stock in the FTSE100, with an average of 3,168,736 shares being traded per day.
HSBC had a profitafter tax for the financial year ending 31/12/2015of £2,553 million, a decerease from £9,881 million for the financial year ending 31/12/2014, an overall -74% change in profit after tax.
HSBC was listed on the London Stock Exchange on
April 8, 1991, and can be traded on Monday-Friday between 8am and 4.30pm GMT (UK time).
HSBC paid a dividend of 38.04p in 2016, an increase from 33.20p in 2015.
Top 10 FTSE 100 Companies by Trading Volume
|Lloyds Banking Group PLC||48,564,260|
|Vodafone Group plc||13,179,891|
|Royal Mail PLC||9,080,697|
|Hargreaves Lansdown PLC||8,135,383|
|Marks and Spencer Group Plc||6,099,715|
|Babcock International Group PLC||5,065,413|
|Legal & General Group Plc||4,680,032|
Top 10 FTSE 100 Companies by Market Cap
|Royal Dutch Shell Plc||£234,574,796,465|
|HSBC Holdings plc||£133,133,889,667|
|BRITISH AMERICAN TOBACCO PLC ADS Common Stock||£68,836,193,752|
|Reckitt Benckiser Group Plc||£45,287,177,680|
|Lloyds Banking Group PLC||£42,457,331,616|
Comparison of HSBC's EPS & P/E Ratio with other Banking companies
HSBC has a price/earnings ratio of 126.57. For comparison, Lloyds Banking Group's P/E ratio is 21.56 and Barclays's P/E ratio is 24.03. HSBC's basic earning per share from continuing operations for the 31/12/2015 financial year was 5.19p, which was a decrease from the previous financial year of 340.36p.
|Company||Basic - EPS||P/E Ratio||Market Cap (Million)|
|HSBC ( LON:HSBA)||5.19p||126.57||£133,134|
|Lloyds Banking Group ( LON:LLOY)||2.90||21.56||£42,457|
|Barclays ( LON:BARC)||9.30||24.03||£26,668|
*Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed.