To trade shares you can either use a traditional stock brokerage firm (such as IG) or you can use a CFD service, such as Plus500 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 Plus500 charge 0.17% 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 LLOY
Pros & Cons of Trading Llloyds shares (LLOY) 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 Lloyds shares. This means that at the current price of £66.99 per share, to buy 50 Lloyds shares with no leverage, it would cost a total of £3,350. However, using leverage of 1:10 , a trader would only require an account size of £335 to place the trade with a CFD broker like Plus500
- 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 Plus500 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, Plus500 currently charge an overnight financing fee of 0.03% for individual equities. This means that for the example trade above, it would cost a trader £0.00 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 https://www.Plus500.com/uk/, see website for full terms and conditions. Your capital is at risk. Last updated on 20th March, 2017.
Lloyds: Key Stats & Background Information
Lloydsshares are currently priced at
£66.99, after opening the day at
£67.25. As of
71,956 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 Lloyds the 13th largest stock on the FTSE 100 index by market capitalisation. In the past 30 days, the Lloyds share price has increased by 0.12%, from £66.91. In the past 90 days, it has ' ; decreased by -1.33%, from £67.89 to the current price of £66.99.
In terms of trading activity Lloyds is the 25th most actively traded stock in the FTSE100, with an average of 0 shares being traded per day.
Lloyds had a profitafter tax for the financial year ending 31/12/2015of £2,514 million, an increase from £956 million for the financial year ending 31/12/2014, an overall 163% change in profit after tax.
Lloyds was listed on the London Stock Exchange on
October 8, 1986, and can be traded on Monday-Friday between 8am and 4.30pm GMT (UK time).
Lloyds paid a dividend of 2.35p in 2016, an increase from 1.50p in 2015.
Top 10 FTSE 100 Companies by Trading Volume
|Taylor Wimpey plc||13,759,641|
|J Sainsbury plc||7,872,869|
|International Consolidated Airlns Grp SA||7,695,942|
|ConvaTec Group PLC||5,537,560|
|WPP PLC ORD 10P||5,497,353|
|British Land Company PLC||3,908,923|
|Land Securities Group plc||3,116,262|
|Compass Group plc||2,922,080|
Top 10 FTSE 100 Companies by Market Cap
|Royal Dutch Shell Plc||£203,287,756,570|
|HSBC Holdings plc||£149,642,311,815|
|British American Tobacco plc||£111,214,709,812|
|BHP Billiton plc||£80,088,327,367|
|Rio Tinto plc||£66,413,465,828|
Comparison of Lloyds's EPS & P/E Ratio with other Banking companies
Lloyds has a price/earnings ratio of 21.56. For comparison, HSBC Holdings's P/E ratio is 126.57 and Barclays's P/E ratio is 24.03. Lloyds's basic earning per share from continuing operations for the 31/12/2015 financial year was 2.90p, which was a decrease from the previous financial year of 86.90p.
|Company||Basic - EPS||P/E Ratio||Market Cap (Million)|
|Lloyds ( LON:LLOY)||2.90p||21.56||£48,203|
|HSBC Holdings ( LON:HSBA)||5.19||126.57||£149,642|
|Barclays ( LON:BARC)||9.30||24.03||£33,186|
*Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed.
Offers four ways to trade: Forex, Spread betting, CFD trading, and options trading
Central Bank of Ireland, ASiC ...
Popular for Trading Lloyds!
2010 traders clicked on AvaTrade this month.
Offers two ways to trade: CFD trading, and social trading
Financial Conduct Authority, C...
Offers three ways to trade: Spread Betting, CFDs, Share dealing (including ISAs) and smart portfolios (including ISAs)
Financial Conduct Authority an...
Offers two ways to trade: CFDs, Forex
Offers five ways to trade: Forex, Shares, Indices, Commodities, ETF and CFD
Offers one way to trade: Forex
Offers one way to trade: Forex
Offers three ways to trade: Forex, CFDs, Spread Betting
Offers two ways to trade: Forex, CFDs
Offers five ways to trade: Stocks, Indices and CFDs, Currencies, Commodities, ETFs