DAY TRADING IN CYPRUS

Written by Andy George


Continued from page 1
  Secondly, investors in Cyprus must pay a sales tax of 0.6% on top of commissions & CSE fees.  The implication of this (assuming commissions are at 0.4%) is that to break even investors must achieve a return of 1.5% that is extremely difficult on a daily basis.  The following example illustrates how hard it is to make money: If an investor invests CYP 10,000 in ABC Limited and he/she makes a 2% gain then he/she will be making a net gain of only CYP 50 (after deducting various costs).  However a 2% loss will result in losses of CYP 350.  This example suggests thatrepparttar dice is weighed against day traders.   Thirdly, a day trader thrives on stocks that are liquid and where there is volatility.  Though there are around 130 stocks listed onrepparttar 112412 CSE, only around 10 stocks haverepparttar 112413 necessary volatility forrepparttar 112414 day trader.  In other words it is no good torepparttar 112415 day trader to but shares in companies that he/she cannot sell later due to a lack of buyers.  The implication of this is that there are not enough stocks forrepparttar 112416 day traders in Cyprus to put their teeth into.   Nonetheless it is possible for Cypriot investors with a PC, internet connection and nerves of steel to try their hands at day trading.  However before doing so investors should read up onrepparttar 112417 subject first so that they understand exactly what they are getting into and to find a handful of financial information sites concerningrepparttar 112418 CSE. DAY TRADING IS A HIGH RISK ACTIVITY: Make no mistake: day trading is a high – risk activity.  In other stock exchanges such asrepparttar 112419 US,repparttar 112420 regulators have urged online brokers to issue warnings to investors about volatility andrepparttar 112421 perils of being highly leveraged.  By this I mean that day traders may be trading onrepparttar 112422 basis of external capital (i.e. loans).  The regulators were worried that if there were fallout inrepparttar 112423 market that many investors would dash forrepparttar 112424 exit and this would create panic inrepparttar 112425 market.  It would appear that this is something that did occur in mid September whenrepparttar 112426 Dow Jones and NASDAQ Index fell due to panic selling.  Hence day trading is very risky especially ifrepparttar 112427 trader borrows to invest.   Another risk is of being fed false information.  Day traders should not rely on information from dubious sources. For example on many chat rooms, a number of participants becomerepparttar 112428 victims of “pump and dump” of rubbish shares by being told that such and such a share will go up x% due to a significant announcement byrepparttar 112429 firm.  In factrepparttar 112430 rumour may be false and it may be an attempt byrepparttar 112431 person to dumprepparttar 112432 shares (at a profit) on some naοve investors. Finally, another risk is that of system failure that could preventrepparttar 112433 day trader from selling at crucial moments.  Day traders should ask his brokers what alternatives are available should there be a systems failure before opening an account.   CONCLUSION: Day trading is a very high-risk activity and anyone who aims to become a day trader needs to carry out proper research on shares if he/she is to be successful.  Though I do not have any concrete information to prove this, many day traders in Cyprus have got their fingers burnt due torepparttar 112434 bear market conditions prevalent duringrepparttar 112435 past few years.  Despite this fact,repparttar 112436 market needs day traders since without these people there would be no liquidity inrepparttar 112437 market. 

Andy George is an accountant with years’ experience as a lecturer. Andy was financial correspondent for eight years at the Cyprus Financial Mirror where he wrote articles on business & accounting related issues to a non-technical audience.

He is the author of eBooks: How to write and Publish Your Own With a Shoestring Budget http://www.budgetebook.com New! Easy Way to Make Auto-Pilot Income http://www.budgetebook.com/cbmall




Defining a long-term investment in the stock market.

Written by Charles M. O'Melia


Continued from page 1

So then, what else? I would argue that a company that just pays a dividend isn’t good enough. Instead, I will only purchase those companies that have a long history of raising their dividend every year. This will eliminate a whole bunch of risk. It would eliminaterepparttar possibility thatrepparttar 112411 company is ‘cooking their books;’ after all,repparttar 112412 money has to be there to payrepparttar 112413 shareholder. And because this company has been raising their dividend every year for many years, it eliminatesrepparttar 112414 risk of investing in a start-up company that may not even be around in a year or so.

Also,repparttar 112415 rising dividend every year would help off-setrepparttar 112416 risk of inflation andrepparttar 112417 risk of a lower stock price duringrepparttar 112418 year would actually accelerate my income fromrepparttar 112419 security.

Since I would want my position inrepparttar 112420 stock to grow throughrepparttar 112421 years, thus increasing my dividend income, all dividends would be reinvested intorepparttar 112422 stock, until retirement. A lower stock price, therefore, would purchase more shares, at a higher dividend yield and would simply accelerate my dividend income.

Nowrepparttar 112423 question may arise, when would I want to sell a stock? Certainly not because a Merrill Lynch has downgradedrepparttar 112424 whole sector – that’s a blessing in disguise – a temporary lower stock price just means a higher dividend yield, allowing my dividend to purchasing more shares.

The question of when to sell a stock puts me inrepparttar 112425 mind of a quote I once read by Jacobsen – “Judgment isrepparttar 112426 one thing you cannot learn at college. You either have it or you don’t have it.” The time/reason to sell a stock varies. If there comes a time when you have so much money tied up in just one stock position that it’s making you feel uncomfortable, sell some of it. Ifrepparttar 112427 company you purchased stopped raising its dividend you may want to lighten up and/or divertrepparttar 112428 funds you were putting into that security into one that is continuing its program of increasing their dividend every year.

A company may trim their dividend – when and if this happens (and it does) my advice is not to be overly anxious to sellrepparttar 112429 stock. Findrepparttar 112430 reason whyrepparttar 112431 company is trimming their dividend. It may be to reduce debt or forrepparttar 112432 possibility of acquisitions. The company’s dividend yield may have been around 6 percent, and all their peers’ dividend yields are around 4 percent. Certainly do not add to your holdings in this company, but give management a chance to see how they handlerepparttar 112433 extra cash, since they appear to have better use forrepparttar 112434 money, other than to pay their shareholders. The resulting growth in that company may make up forrepparttar 112435 lower dividend yield and two or three years later you’ll get a better perspective on whether to sellrepparttar 112436 company or not (or to continue adding more shares through new monies, or simply to allowrepparttar 112437 dividends to continue purchasingrepparttar 112438 stock).

For more excerpts fromrepparttar 112439 book ‘The Stockopoly Plan’ visit http://www.thestockopolyplan.com

Charles M. O’Melia is an individual investor with almost 40 years of experience and passion for the stock market. Author of the book ‘The Stockopoly Plan’, soon to be released by American Book Publishing.


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