Pello Capital offers an execution only CFD service for clients through partnership with a leading City institution; as well as providing a range of add-on services.
A contract for difference (CFD) is a derivative: its price is based on the underlying market price of an asset, such as a share. When you trade CFDs you trade on the change in an asset’s value, without ever owning that asset.
Pello Capital offers an execution only CFD service for clients, as well as providing a range of add-on services. This includes up to the minute market information and research, technical analysis and other tools to assist you in your day to day trading strategies. We have relationships with a range of providers and resources to suit each individual investor’s requirement, from a basic CFD account to execute your own ideas, right through to market maker execution and using your CFD account for IPOs and secondary placings.
We understand that everyone is different and suggest that an initial conversation with us to discuss the different options available is the best way to start. If you would like to have a conversation with one of Pello’s experienced brokers, please send us an email and a member of the team will be in touch shortly.
The Basics of Contracts For Difference
CFD’s allow an investor to trade a greater number of instruments globally through the use of margin as opposed to buying in cash, including:
• International stocks
• Global indices based
• Commodities, FX and bonds
• CFDs on Futures and Options
The benefits to trading using CFDs include:
• No Stamp Duty to pay.
• *The use of margin to trade stocks.
• The ability to trade on rising and falling markets through short selling, for price discovery in itself or to hedge an existing share portfolio.
Let’s look at a CFD example trade for Prudential on a typical CFD account that has £20,000 of funds.
• You believe that UK stocks are cheap ahead of the Brexit decision and Prudential stands out as on good technical support with buying volume below 1300p:
• A £20,000 long position is bought in Prudential at 1270p.
• Prudential is 5% margin, so 5% of £20,000 (£1000) of margin from your account is used as a deposit.
• In this example, Prudential moves higher by 10% to 1395p and subsequently closed.
• The profit is 10% of the £20,000, so you realise £2000 before costs. 10% profits on the total account.
Clearly a small amount of funds are needed to gain this exposure, and it is possible (though very risky) to buy much larger amounts of this stock with funds on the account as margin. It is important to remember that while this can lead to significant gains on your account, losses are also magnified.
Investment in CFD and Spread Betting products involves a high degree of risk and are not suitable for all investors. It’s possible to quickly lose substantially more than your initial deposit and you may be required to make further deposits at short notice to maintain open positions. Trading on margin, whilst allowing you to maximise gains, also maximises potential losses and a relatively small movement in a currency can have a disproportionately dramatic effect on your trade. You may be called upon to deposit substantial additional margin, at short notice, to maintain a trade. You should not engage in trading these leveraged products unless you understand the nature of the transaction you are entering into, the risks involved and the true extent of your exposure to the risk of loss.
Pello Capital Limited offers investments and services to clients, which are primarily considered to be high risk investments. Some investments such as contracts for difference use leverage which can magnify gains but equally can magnify losses. Leveraged products may lose investors more than the amount they initially invested. This website is provided for information purposes only. It is not an offer to sell, or a solicitation of an offer to buy, any security, nor enter into any agreement or contract with Pello Capital Limited. All information provided is indicative and subject to market conditions and availability. Not all financial products are suitable for all investors. Before entering into any transaction you should ensure that you understand and have made an independent assessment of the suitability and appropriateness of the transaction into which you are entering and the nature and extent of your exposure to risk of loss in light of your own objectives, financial and operational resources and other relevant circumstances. You should take such independent investigations and such professional advice as you consider necessary or appropriate for such purpose. Past performance is no indicator of future success.
Pello Capital Limited, company number 5267797. Pello Capital Limited is authorised and regulated by the Financial Conduct Authority (FCA) with Financial Services register number 449720 and is a member of the London Stock Exchange (LSE) and Nex Exchange.