CFD trading for SGX listed stocks in

Singapore

Date: 17 August 2015

STI 1993 - 2015

Disclaimer

�  No license to give financial advice

�  Consult your personal financial adviser

A little bit more about CFDs

Date: 17 August 2015

Salient features

�  A CFD is a tradable instrument that mirrors the movements of the asset underlying it. It allows for profits or losses to be realized when the underlying asset moves in relation to the position taken, but the actual underlying asset is never owned. Essentially, it is a contract between the client and the broker.

�  Ownership �  Risk

�  https://masnetsvc.mas.gov.sg/FID.html

Cost of trading

�  Commission per trade

�  Daily financing

�  Dividends

�  Data fee

�  http://www.ig.com/sg/shares-cfd-details

3 key CFD strategies

�  Long positions (substitute for contra-trading*)

�  Sell positions (substitute for naked shorting, share borrowing)

�  Hedging for risk protection (long stock, short CFDs)

�  http://portal.iocbc.com/help-and-support/share-borrowing.html

�  https://www.phillip.com.sg/stocks-a-shares/shares-borrowing-and-lending.html

�  http://sgmarketwatch.com/2011/04/what-is-singapore-contra-trading/

�  http://www.straitstimes.com/business/new-sgx-trading-rules-what-you-need-to-know

Long strategy: Buy low sell high

Short strategy: Sell high buy low

Hedge

�  100% hedge i.e. go to neutral

�  Partial hedge

�  Part of a plan e.g. ownership, dividend, collateral etc.

Own stock, sell CFD to go neutral

�  Mr Tan owns 10,000 shares of XYZ.

�  When XYZ was trading at $30, he monetized it by using it as a collateral and received $24 per share.

�  With 240k in hand, he made down payment for a new condominium.

�  He expect XYZ shares to be stable, that he continues to receive yearly dividends of around 2.5%.

�  His life was in shambles when XYZ fell to $10 in a financial crisis.

Alternate timeline: 100% hedge

�  Sensing a crisis, Tan sold 10,000 XYZ CFDs at $28. He lost $2 per share on his stocks.

�  But when XYZ fell to $10, his $18 dollar gain per CFD offset corresponding stock losses.

�  He was ‘neutral’.

�  When XYZ reversed to $12 per share, Tan sense a recovery and closed his CFDs at $16 gain.

�  His XYZ exposure to market risks is now $12.

It’s about time http://bit.ly/tasstalk

Is market doing that well?

Copper mthly

Baltic Dry Index mthly

Crude oil mthly

Natural gas mthly

Relative performance

China drops 30 percent

No market escapes stock/business cycle

Buying climax Failing 52-week highs and lows

Long term trend lines

Stock market signals

China A50 buying climax

Hang Seng Index buying climax?

Straits Times Index buying climax?

Danger Signs You Risk Ignoring

�  12 blue chips with new 52-week lows �  Genting Singapore, Global Logistic �  Golden Agri, Hutchison Port �  Jardine C & C, Jardine Strategic �  Keppel Corp, Noble Group �  Sembcorp, Sembmarine �  SIA Engineering, Starhub

Trend is over (http://bit.ly/8bluechips)

�  BN4 Keppel Corp – TL from 1998 broke last year.

�  CC3 Starhub – TL from 2005 broken in May 2 this year.

�  J36 Jardine Matheson – TL 1998 - 2015.

�  J37 Jardine Strategic – TL 2003 - 2015.

�  S51 Sembmarine – TL 2001 – 2014.

�  U96 Sembcorp - TL 2002 – 2014.

�  E5H Golden Agri - TL 2002 – 2013.

�  C6L Singapore Airlines - TL1998 – 2013. Same TL November 2014 – May 2015.

Price falling with high volume

�  A17U Ascendas REIT

�  BN4 Keppel Corp

�  C07 Jardine C & C

�  C09 City Development

�  MC0 Global Logistics

�  N21 Noble

�  O39 OCBC

�  U96 Sembcorp - TL 2002 – 2014.

Internal signals

This is the best time now speculate on a direction or to apply protection to portfolio

If market is that bad should I stay away?

Strategies for bear market

1.  Start with a list of stocks that have short CFDs avail. https://www.ig.com/sg/shares-cfd-details

2.  Identify sectors that are already trending down

3.  Sell into biggest losers after they have retraced

4.  Rotational play

5.  Do not do counter trend

6.  Time with broad market sentiment based on STI

Strategies for bear market 1.  Scan for 52-week highs and lows

2.  Scan for high volume

3.  https://www.ig.com/sg/ig-market-screener

4.  http://www.sharesinv.com/prices/top-52-week-low/

5.  https://www.google.com/finance?ei=-6nRVbm6Hs2kugTQ7YTIAw#stockscreener

6.  http://www.investing.com/charts/stocks-charts

Best stocks for CFD trading

1.  Blue chips, market darlings

2.  Liquidity, availability of scrip, fast-moving

3.  Responsive to market sentiments, story-driven

4.  Trading at $1 - $10 region

5.  Has made new 52-week high or 52-week low

6.  Belongs to growing/troubled sector

Buy strongest sell weakest - stocks

1.  http://www.ftse.com/products/indices/SGX-ST

2.  http://www.ftse.com/Analytics/FactSheets/Home/FactSheet/ProductRegions/OTHER/1/ASIA/1

Buy strongest sell weakest - sectors

1.  http://www.ftse.com/products/indices/SGX-ST

2.  http://bit.ly/FTST-factsheets

Major signal for STI (see charts for subindices)

STI 1-year heatmap (http://bit.ly/sgxheatmap)

‘All sectors’ 1 month performance ‘Financials’ 1 day performance

Within sector – which stock is weakest?

‘Financials’ 3 month performance ‘Financials’ 1 day performance

FST China Indices

Momentum Consolidation

Chart pattern

What does the best setups

look like? (Switch over to charts)

STI 1993 - 2015

9-point crash guide (http://bit.ly/9crashguide)

1.  10% corrections in the stock market are healthy and nothing to worry about.

2.  15% corrections might even be labeled ‘oversold’.

3.  Be very worried if market crosses 20% mark. Bad markets go into a tailspin worsened by margin calls and forced selling.

4.  Illiquid stocks may gap down repeatedly due to absence of quotes.

5.  Steep rallies can still happen in the bear market.

6.  Don’t fall in love with any particular stock. Be quick to cut losses and never average down.

7.  Price may drop on low volume but price drops on high volume are almost certainly bad. Never catch a falling knife.

8.  A crisis is a good opportunity. Always have a reserve. Some of the most successful old-timers in the stock market did not trade. They made their money buying generational lows.

Never fall in love

For individuals who sign up account today 3 Shenton Way #25-02 Shenton House (S) 068805

Register: forex@terraseeds.com or SMS 8298 6982

IG platform training 27 August 7pm – 9pm

CFD trading for SGX listed stocks in Singapore Monday 17 August 2015 7 – 9.30pm

3 Shenton Way #25-02 Shenton House (S) 068805 Register: forex@terraseeds.com or SMS 8298 6982

$40 per pax

The end