To trade Provident Financial shares you can either use a traditional stock brokerage firm (such as IG) or you can use a CFD service, such as LCG 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 LCG 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 PFG
Pros & Cons of Trading Provident Financial shares (PFG) 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 £478.90 per share, to buy 50Provident Financial shares with no leverage, it would cost a total of £23,945.00 £23,945. However, using leverage of 1:20, a trader would only require an account size of £1,330.28 £1,197 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 LCG 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, LCG currently charge an overnight financing fee of 2.73% for individual equities. This means that for the example trade above, it would cost a trader £1.79 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.lcg.com/uk/, see website for full terms and conditions. Your capital is at risk. Last updated on 20th March, 2017.
Provident Financial: Key Stats & Background Information
Provident Financialshares are currently priced at
£478.90, after opening the day at
£471.30. As of
Provident Financial have
253 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 Provident Financial the 91st largest stock on the FTSE 100 index by market capitalisation. In the past 30 days, the Provident Financial share price has decreased by -7.01%, from £515.00. In the past 90 days, it has ' ; decreased by -6.36%, from £511.40 to the current price of £478.90.
In terms of trading activity Provident Financial is the 93rd most actively traded stock in the FTSE100, with an average of 33,790 shares being traded per day.
Provident Financial had a profitafter tax for the financial year ending 31/12/2015of £218 million, an increase from £176 million for the financial year ending 31/12/2014, an overall 24% change in profit after tax.
Provident Financial was listed on the London Stock Exchange on
March 16, 1962, and can be traded on Monday-Friday between 8am and 4.30pm GMT (UK time).
Provident Financial paid a dividend of 103.10p in 2016, a decerease from 88.10p 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|
In the past 52 weeks, Provident Financial's shares hit a low of £440.00 and a high of £716.00. This means that their current share price is 8.84%above the 52-week low and 33.11%below the 52-week high.
Comparison of Provident Financial's EPS & P/E Ratio with other Financial Service companies
Provident Financial has a price/earnings ratio of 20.71. For comparison, Schroders's P/E ratio is 16.82 and 3i Group's P/E ratio is 5.33. Provident Financial's basic earning per share from continuing operations for the 31/12/2015 financial year was 151.80p, which was a decrease from the previous financial year of 230.70p.
|Company||Basic - EPS||P/E Ratio||Market Cap (Million)|
|Provident Financial ( LON:PFG)||151.80p||20.71||£1,213|
|Schroders ( LON:SDR)||171.10||16.82||£8,386|
|3i Group ( LON:III)||85.60||5.33||£10,450|
*Information is provided "as is" and solely for informational purposes, not for trading purposes or advice, and may be delayed.