SHORT TERM INVESTMENTS

COMMODITIES

Commodities are items that occur naturally in several broad categories: metals (aluminum, gold, silver), energy (oil, natural gas, heating oil) agriculture (cotton, corn, wheat, soybeans, oranges, sugar and lumber), and livestock and meats (cattle, hogs, pork bellies). They’re an asset class available to investors, just like traditional stocks, bonds and cash.

Commodities are traded on exchanges via futures contracts, allowing those who use these and other commodities in the course of their normal business activities lock in prices at which they can buy or sell the commodity at some point in the future. They can also be a way for producers to hedge prices. For example, a farmer might buy or sell futures contracts to hedge their corn crop or the value of their live hogs in an effort to lock in a profit.

Investors can trade these futures contracts in an effort to benefit from the movement of the price of the underlying commodity. They’re not looking to take delivery of the physical commodity—the last thing an investor living in a luxury condo in Chicago’s Gold Coast wants is a herd of live cattle delivered to the front door of the building. They’re simply speculating on the future price of these items.

CRYPTOCURRENCIES

Imagine if you knew how to invest in cryptocurrency like the people that have been in the game for several years.

Surprisingly, that’s not as hard as it sounds, and you will have no issues at all following this guide even if you’re a beginner.

Concepts such as “cryptocurrency” and “blockchain” have become major buzzwords in the financial world as of late and, even if you aren’t from an economics background, people are starting to realize that things like Bitcoin and Ethereum can be major moneymakers.

Investing and trading in digital currencies is quickly turning into the newest way to jump on the cryptocurrency bandwagon, and while it isn’t too late to join the party, wrapping your head around exactly how to do that is one very daunting task.

OTCs provide customers with a quote for one upfront fixed price for the entire amount that you would like to buy or sell, avoiding the price slippage you would face on an exchange. It’s also done in one transaction as opposed to multiple smaller transactions.

Due to high demand, ALPHA CAPITAL has introduced many cryptocurrencies to its tradable intraday, allowing clients to expand their trading strategy and include these instruments in their daily trading.

ALPHA CAPITAL enables you to trade a variety of pairs consisting of Bitcoin, Ethereum, Litecoin, Dashcoin and Ripple, all at very competitive prices and great liquidity to suit all your trading needs.

CURRENCIES

It refers to currency exchange where difference in currency value helps to make profits. This is termed to be a huge market as the traded values are much higher when compared to equities. Previously, only corporations and large banks were involved in currency trading. But advancements made in technology have made it possible for retail investors to enter this domain as it is a wonderful and attractive investment avenue.

ALPHA CAPITAL provides financial services in BSE. We share our expertise and experience with all our clients and undertake adequate researches to provide authentic information to help our clients to exchange foreign currencies with great confidence and at low brokerage charges.

Why Should You Invest in Currencies?

Being open 24 hours a day, the currency market does have huge volumes of liquidity. It is found resilient to the factors that affect the stock market. Therefore, it proves to be an effective way to expand the investment portfolio. But, currency trading is prone to risks, and hence, will require thorough risk benefit analysis and careful planning. Some benefits offered by currency trading are as follows:

  • Round the clock trading :Transactions can be done at any point of time since this market is open 24/7.
  • Leverage: Currency futures trading involve leverage usage through broker maintained margin. Therefore, it becomes easier to execute large transactions using less cash amount in hand
  • Low costs: Due to low spread levels, the transactions invite lesser brokerage fees, thereby reducing effectively trading related expenses.
  • Higher liquidity: With large transactions taking place almost every day, higher liquidity level is offered by the currency market. With great ease, you can exit and enter the market as desired.

EQUITIES

An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. These shares are typically traded on a stock exchange.

Why should I consider equities?

Equity investors purchase shares of a company with the expectation that they’ll rise in value in the form of capital gains, and/or generate capital dividends. If an equity investment rises in value, the investor would receive the monetary difference if they sold their shares, or if the company’s assets are liquidated and all its obligations are met. Equities can strengthen a portfolio’s asset allocation by adding diversification.

What are the potential benefits of equity investments?

  • The main benefit from an equity investment is the possibility to increase the value of the principal amount invested. This comes in the form of capital gains and dividends.
  • An equity fund offers investors a diversified investment option typically for a minimum initial investment amount.
  • If an investor wanted to achieve the same level of diversification as an equity fund, it would require much more – and much more manual – capital investment.
  • Investors may also be able to increase investment through rights shares, should a company wish to raise additional capital in equity markets.

ETFs

An exchange-traded fund is a basket of securities — stocks, bonds, commodities or some combination of these — that you can buy and sell through a broker. ETFs offer the best attributes of two popular assets: They have the diversification benefits of mutual funds while mimicking the ease with which stocks are traded.

Like any financial product, ETFs aren’t a one-size-fits-all solution. Evaluate them on their own merits, including management costs and commission fees (if any), how easily you can buy or sell them, and their investment quality.

An exchange-traded fund — better known by the acronym “ETF” — is a fund that can be traded on an exchange like a stock (hence the name). ETFs give you a way to buy and sell a basket of assets without having to buy all the components individually.

An ETF works like this: The fund provider owns the underlying assets, designs a fund to track their performance and then sells shares in that fund to investors. Shareholders own a portion of an ETF, but they don’t own the underlying assets in the fund. Even so, investors in an ETF that tracks a stock index get lump dividend payments, or reinvestments, for the stocks that make up the index. (Related: Learn how to invest in index funds.)

How ETFs work, in 3 steps

  • An ETF provider considers the universe of assets, including stocks, bonds, commodities or currencies, and creates a basket of them, with a unique ticker.
  • Investors can buy a share of that basket, just like buying shares of a company.
  • Buyers and sellers trade the ETF throughout the day on an exchange, much like a stock.

HEDGES

If you are a business that has operations outside of your country’ borders you will inevitably have to deal with currency risk. Currency risk, also known as foreign exchange risk, refers to the risk of a potential loss stemming from exposure to fluctuations in currency exchange rates.

Hedging your forex positions is a common way of offsetting the risk of price fluctuations and reducing unwanted exposure to currencies from other positions.

Forex hedging is the act of strategically opening additional positions to protect against adverse movements in the foreign exchange market.

Hedging itself is the process of buying or selling financial instruments to offset or balance your current positions, and in doing so reduce the risk of your exposure. Most traders and investors will seek to find ways to limit the potential risk attached to the exposure, and hedging is just one strategy that they can use.

A trader might opt to hedge forex as a method of protecting themselves against exchange rate fluctuations. While there is no sure-fire way to remove risk entirely, the benefit of using a hedging strategy is that it can help mitigate the loss or limit it to a known amount.

INDEXES

An index is an indicator or measure of something, and in finance, it typically refers to a statistical measure of change in a securities market. In the case of financial markets, stock, and bond market indices consist of a hypothetical portfolio of securities representing a particular market or a segment of it. (You cannot invest directly in an index.) The S&P 500 and the US Aggregate Bond Index are common benchmarks for the American stock and bond markets, respectively. In reference to mortgages, it refers to a benchmark interest rate created by a third party.

While you cannot buy indexes (which are just benchmarks), there are three ways for you to mirror their performance:

  • Indexing: You can create a portfolio of securities that best represents an index, such as the S&P 500. The stocks and the weightings of your allocations would be the same as in the actual index. Adjustments would have to be made periodically to reflect changes in the index. This method can be quite costly since it requires an investor to create an extensive portfolio and make hundreds of transactions a year.
  • Buy index funds: Index funds are a cheap way to mimic the marketplace. While index funds do charge management fees, they are usually lower than those charged by the typical mutual fund. There are a variety of index fund companies and types to choose from, including international index funds and bond index funds.
  • Index ETFs: Exchange-traded funds track an index and, like index funds, represent a basket of stocks but, like a stock, trade on an exchange. You can buy and sell ETFs just as you would trade any other security. The price of an ETF reflects its net asset value (NAV), which takes into account all the underlying securities in the fund.

Because index funds and ETFs are designed to mimic the marketplace or a sector of the economy, they require very little management. The beauty of these financial instruments is that they offer the diversification of a mutual fund at a much lower cost.

PRECIOUS METALS

Gold, silver and platinum have been recognized as valuable metals, and have been coveted for a long time. Even today, precious metals have their place in a savvy investor’s portfolio.

There are many ways to buy into precious metals like gold, silver, and platinum, and a host of good reasons why you should give in to the treasure hunt.

Filling Up Your Treasure Chest

In ALPHA CAPITAL we have several options available to invest in precious metals.

  • Commodity ETFs: Exchange-traded funds exist for all three precious metals.
  • Common stocks and mutual funds: Shares of precious metals miners are leveraged to price movements in the precious metals.
  • ETIM Products: Electronic Intraday Trading without compromise the principal asset.
  • Futures and options: The futures and options markets offer liquidity and leverage to investors who want to make big bets on metals.

Precious Metals Benefits:

Precious metals have no credit risk, maintain their global purchasing power over the long-term in the face of inflation or currency devaluation, and aren’t very tightly correlated with stocks, bonds, or real estate.

Precious Metals Risks:

Every investment comes with its own set of risks. Although they may come with a certain degree of security, there is always some risk that comes with investing in precious metals. Prices for metals can drop during times of economic certainty, putting a damper for people who like to invest heavily in the precious metals market. Selling may be a challenge during times of economic volatility, as prices tend to shoot up. Finding a buyer for physical metals may be difficult.

Another risk to precious metals prices includes the issue of supply. When demand shoots up, the existing supply may begin to deplete. And that means producers will have to bring more of each metal into the market. If there is a short supply of mineable metals, that could put pressure on prices.

ETIM

What are ETIMs?

A ETIM stands for ELECTRONIC TRADING IMMEDIATE MATURE. When you trade ETIMs, you don’t physically own the underlying asset, instead, you are speculating on the price movement of that asset (financial instrument). This means you can take advantage of prices move up or down in value, on thousands of global financial markets including currencies, indices, commodities and more. This arguably gives you greater trading freedom.

ETIMs are a gearing financial trading product, which essentially means you are trading on margin. Geared trading allows an investor to put up only a small upfront investment in order to open a much larger position. This means rather than paying the full value of the position, you only need to pay a percentage of the position, which is called “initial margi”’. Trading ETIMs increases your buying power, maximizing your trading capital and potential profits. However, it is important to note that leveraged trading also exposes you to more risk, as losses can be equally magnified if the trade goes against you, due to the fact they would be based on the full value of the position. It is possible to lose your entire investment, if you are a Retail client. Professional clients can lose more than their deposits and they may be required to deposit additional funds to cover their losses.

Think of leverage as a broker enabling you to make the most of your trading capital.

ETIMProducts trading are leveraged products and as such carry a high level of risk to your capital which can result in losses greater than your initial deposit. These products may not be suitable for all investors. ETIMs are not suitable for pension building and income. Ensure you fully understand all risks involved and seek independent advice if necessary.