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Hichens Harrison Derivatives ("HH Derivatives") was established in 2007 to expand the margin products
traded and to develop an online trading platform for CFDs on equities, bonds, indices, currencies and
commodities. The online platform was launched in December 2007. During the course of 2008,
additional spread betting services will be provided. This new business is targeting existing and new retail and professional
clients.
Derivative Products
Products you can trade as CFDs
- All UK Equities (margin may be higher
on Smaller Cap Stocks)
- Indexes (FTSE, European, Dow, American)
- Foreign Stocks
- CFDs on Options
Alternative Products provided by HH Derivatives
- Covered Warrants (Brand New Market)
- Structured Product, such as capital guarantee
bonds
What is a CFD?
A Contract for Difference is a product traded on margin, which allows you to mirror the performance of an underlying share (price, performance, dividends etc), without the added cost of stamp duty.
You pay only a financing cost and basic commission rate.
Main Characteristics
Cost Effective:
No stamp duty is incurred when trading an equity as you do not physically buy the shares. Instead,
you are issued with an open-ended contract for the trade.
Directional Trading:
Trading a CFD short is a convenient and cost effective
way of mirroring a potential fall in the underlying share.
Geared:
Holders of a long/short CFD position need only deposit a margin as collateral, rather than pay the full underlying
value of the stock.
Open-Ended:
The long/short CFD position can be held indefinitely, as it
is an open-ended contract with no settlement date.
Benefits of Using CFDs
Corporate Actions: You receive dividends on the ex- dividend date, rather than the pay date. Bonus issues and stock splits are also realised on CFD positions, even though you are not the physical owner of the stock.
Equity Release: If you wish to release funds tied up in Equities you can transfer your position into a CFD, releasing 80% of funds which can be used for reinvestment.
Financing: Holding a long CFD position will make you liable to overnight financing charges on the position spread over Libor, but you will also receive interest on the margin held on deposit with us. Going short on CFDs means you receive both interest on the margin held with us, and finance on the position.
High business turnover: It is easier to trade in larger amounts, and more often, even if you do not have the capital layout. Day Trading becomes much more attractive without the added cost of Stamp Duty.
Instant Closure: You have the ability to close out positions instantly, releasing profits immediately and releasing any monies held as margin.
Professional Trading: You may be able to take the opportunity of selling a CFD short if you are the holder of the physical underlying stock. This will hedge your risk against a short term correction on the downside, as protection for your profits elsewhere.
Realised Profit & Losses: As prices are marked to market daily, any profits/losses are realised daily.
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