CFD EquitiesStock Picks With Charts

Nicholas Tan (CMT, CFTe)

Associate Director LFX and CFD

UOB Kay Hian, Alternative Products

Contract For Difference

• Contract For Difference (CFD)

• Is an agreement between two parties (client

and UOBKH) to settle the difference between

the opening and closing price at the close of

the contract.

• Multiplied by the number of units of the

underlying asset specified in the CFD.

• Underlying = Equity shares

− eg Alibaba

2

• No ownership of underlying assets, but still entitled to

certain corporate actions

• Book entry with broker

• Dividend entitlement

• Derivatives – Based on underlying stock

• Allows leverage trading (ie margin)

• Allows short selling

3

Contract For Difference

3

UOBKH Equity

Omnibus account

CFD Platform - IRESS

DMA Order Flow

4

Clients’ Orders

Singapore

Exchange

NY Stock Exchange

BURSA

ASX

We use a Direct Market Access Model

Taking Advantage Of CFD

Think of CFD account as

a margin account with10X leverage

if client is bullish

Allows you to short sell

Think of CFD account as a

stock borrowing account if client

is bearish

5

Price Swing

6

Is there a way to know the turning points?

Trading With MACD Indicator

• Moving Average

Convergence/Divergence

• Can spot changes in

• Strength, direction, momentum and duration

of a trend

• Using 2 moving averages

• Illustrates changes in trend between

faster and slower MA

7

How To Determine The Swing?

8

Trading With MACD Indicator

2 uses of MACD

1. Direction

2. Divergence

9

Reading The MACD’s Lines

Zero

Line

Bullish

Bearish

Bullish

Crossover

Bearish

Crossover

10

Reading The MACD’s Histogram

Crossover

Crossover

11

How To Determine The Swing?

12

How To Determine The Swing?

13

Turning Point - Divergence

14

Turning Point - Divergence

15

Turning Point - Divergence

16

Using MACD In Trading

Can price goes higher?

17

Using MACD In Trading

18

19

Questions & Answers

Disclaimer

No part of this document may be reproduced or copied in any

form or by any means without prior written permission/consent

of UOB Kay Hian.

No warranty or representation, express or implied, is made

with respect to the information set out in this proposal, nor will

UOB Kay Hian be responsible for the consequence of reliance

on any opinion or statement set out herein.

20