Experience Trading
on the Go
on the Go
Reading time: 9 minutes
Incorporated in 1983 and with more than 3,800 stores, Domino's Pizza Enterprises Limited (ASX; ticker: DMP) is the largest pizza chain in Australia and the world’s biggest franchisee for the Domino’s Pizza brand, which is owned and listed in the US. Domino's Pizza Enterprises Limited is the master franchise for Domino’s in several countries, including Australia, New Zealand, Belgium, France, the Netherlands, Germany, Luxembourg, Taiwan, Malaysia, Singapore, and Cambodia.
With a workforce of over 10,000 people and a market value of AU$2.38 billion, Domino's Pizza Enterprises Limited provides an extensive pizza menu, including featured products, combo deals, and the option to ‘make your own pizza’. In addition, ‘Meltz’ products and snacks and sides, drinks, and desserts are available.
Serving as leveraged financial derivatives, Contracts for Differences (CFDs) work similarly across all markets: they ‘derive’ their value from the underlying asset’s performance. For example, CFDs are used to speculate and hedge across Currencies (Forex), Commodities, Bonds, Exchange-Traded Funds (ETFs), and individual Shares, such as Domino's Pizza Enterprises Limited. Given their derivative nature, CFDs do not allow investors to take ownership of the underlying asset; investors simply trade – buy and sell – the underlying price movement.
CFD investors often trade the markets using leverage. This is a key attribute of the CFD market. Let’s assume you want to buy 50 shares of company XYZ, and the company’s share price is trading at US$50.00. Purchasing these shares unleveraged would set you back US$2,500. However, with FP Markets, you can trade an equivalent position size and only put up 20% of the initial investment value: US$500.00. By trading on margin, you have effectively leveraged your account equity by 5:1.
1. Open an FP Markets Forex and CFD Trading Account
The first step in investing in Share CFDs involves opening a Forex and CFD trading account with FP Markets.
Head to the FP Markets main webpage and click the OPEN LIVE button in the upper right corner. Following this, fill out the five-step Account Application to register your account.
2. Download your Trading Platform
Like most professions, having the right tools can make a huge difference to one’s performance. For investors, working with the right trading platform that provides you with all the tools needed to trade is essential. With FP Markets, you can access several world-class trading platforms from the Client Portal (using the login details sent to your registered email address during your registration in Step 1).
The majority of Share CFD investors prefer using MetaTrader 5 (MT5) and cTrader.
3. Find the DMP Ticker
The process involved in finding the DMP ticker on MT5 is straightforward from the platform’s Market Watch feature (Ctrl+M – see the first image below). The Market Watch lists active bids and offers for the products available with FP Markets. You could right-click anywhere in the Market Watch and select ‘Show All’ to view all the instruments (not recommended), or type ‘DMP’ at the bottom of the Market Watch and select the stock to create a new row. You can then drag/drop the stock to the chart’s primary interface on the right and alter its properties to suit your trading preferences (see the second image below).
4. Place the Buy or Sell Order
Although there is the option of entering buy and sell orders through MT5’s one-click trading feature (see image on the right below), most investors opt for the platform’s order window (F9 – see image on the left below). Within the order window, not only can you enter buy and sell orders, but you may apply stop-loss and take-profit orders, in addition to entering trading volume and selecting different order types.
Share CFDs:
There is no denying that Domino's Pizza Enterprises Limited is in a slump. Elevated inflation across many developed economies affected not only consumers but also many companies’ profitability, and it has been an ugly couple of years for the share price of DMP.
The company's financial performance in FY23 and FY24 was marked by declining profitability. While food sales grew modestly, EBIT (Earnings Before Interest and Taxes) and net profits deteriorated significantly. Despite a slight uptick in sales and EBIT in FY24, the underlying NPAT (Net Profit After Tax) remained weak, indicating a persistent profitability challenge.
Technically, as you can see from the daily chart of DMP, the stock is in a clear downtrend, which, by and of itself, will emphasise sell-on-rally scenarios. Therefore, the latest pullback from the low of A$22.75 may be viewed as a sell-on-rally setup.
The caveat, however, is that support rests just below current price at A$29.14 and the next clear resistance is not seen until A$34.08. As a result of this, a deeper pullback to the said resistance could be seen before sellers try to make an appearance. Alternatively, a breakout below current support could also be considered a sell signal and may trigger further bearish action in line with the underlying downtrend.
Physical shares are traded on formal stock exchanges, such as the NYSE (New York Stock Exchange) and the (ASX) Australia Securities Exchange. Domino's Pizza Enterprises Limited sell shares of the company to investors in order to raise money to fund growth and research, as well as fulfil debt obligations.
When investors buy shares of a company, they become partial owners of that company. The investor will benefit from capital appreciation if the company’s share price rises. The investor may also be entitled to dividend payments, which will usually come with voting rights.
Futures and options are leveraged derivative instruments that derive their value from underlying share prices and are traded on formal derivatives exchanges, and can be physically settled. However, this is uncommon, with most investors opting for cash settlement.
A futures contract is a legally binding agreement to buy or sell an asset at a specific price on a future date and both buyers and sellers are obligated to fulfil the contract. An options contract grants the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price on a specific date. In exchange for a premium paid by the option buyer, the seller of the option assumes the obligation to fulfil the contract if the buyer chooses to exercise their right. Regardless of whether the option is exercised, the seller retains the premium as compensation for taking on the risk.
ETFs are investment funds designed to track a specific market index or a collection of assets. Designed to mimic the performance of a particular market segment, ETFs can range from broad market indexes like the S&P 500 or Nasdaq to more targeted sectors such as technology or energy. ETFs trade on stock exchanges like individual stocks, featuring unique ticker symbols with prices that fluctuate throughout the trading day.
It must be noted that while there are single-stock ETFs available for many stocks, most ETF investors tend to choose passively managed ETFs that track an underlying market index, specifically for their diversification benefits, low cost, and tax efficiency.
1. Does DMP pay a dividend?
Domino's Pizza Enterprises Limited does pay a dividend. As of writing, the company’s annual dividend yield is 3.53%.
2. What are the major differences between CFDs and physical shares?
CFDs are derivative contracts that don't allow ownership of the underlying asset, and they offer high leverage, which can amplify both potential profits and losses. They're also traded over the counter through a broker.
On the other hand, physical shares represent partial ownership of a company, often entitling investors to dividend payments as well as voting rights. They're typically traded on regulated stock exchanges and are usually traded through a cash account.
3. Can I trade DMP on MT5?
With FP Markets, DMP can be traded on both MT5 and cTrader.
4. What are the trading hours for DMP?
The trading hours for DMP are between 01:00 and 07:00 GMT+2 (Monday-Friday).
Access 10,000+ financial instruments Auto open & close positions News & economic calendar Technical indicators & charts Many more tools included
By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.
Source - cache | Page ID - 48827
