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Headquartered in Boston, Massachusetts, the General Electric Company (NYSE; ticker: GE) was founded in 1892 and has a legacy of innovation and technological advancements. Today, the company remains a dominant player in the global industrial sector and has a market value of US$198 billion. Also, according to market capitalisation, it is ranked as the 70th largest company in the world and has a workforce of 168,000.
In recent years, GE has streamlined its focus towards its key business segments. These include GE Aerospace, GE Vernova, and GE Healthcare.
Contracts for Differences (CFDs) are a unique and popular way to trade, invest, and hedge in the global financial markets, including individual Stocks, such as GE, Stock Indexes, Currencies, Bonds, Commodities, Exchange-Traded Funds (ETFs), and Digital Currencies.
CFDs work similarly to other leveraged derivative products: two parties (a buyer and a seller) agree to buy and sell based on a trading position's opening and closing prices. Importantly, all CFD trades are settled in cash; unlike futures and options contracts, physical delivery is not an option in the CFD market. Therefore, given CFDs' derivative nature, investors do not take ownership of the underlying asset; investors invest/hedge based on the underlying price movement.
To explain how leverage works in the CFD market, consider this simple scenario. Company XYZ is trading at US$100 per share, and you purchase ten shares; this would amount to a total cost of US$1,000. However, with FP Markets, if you invested in the same company at an identical price through a GE Share CFD, you would only need to ‘put up’ 20% of the total cost (initial margin: US$200) to trade an equivalent position size. By doing so, you have effectively leveraged the position by a factor of 5:1.
Step 1 entails registering for a Forex and CFD trading account. To do this, visit the FP Markets main webpage, click the ‘OPEN LIVE’ button in the top right corner and complete the Account Application.
Once you have registered your trading account, log in to the FP Markets Client Portal using your login details (sent to your registered email ID) and select ‘Platforms’ from the main menu on the left. Following this, select your preferred trading platform – most Share CFD investors choose either MetaTrader 5 (MT5) or cTrader.
Finding the GE ticker on MT5 can be achieved through the platform’s Market Watch tab (Ctrl+M). Investors can type their desired security at the bottom of the Market Watch (see the first image below), select the appropriate instrument and then drag/drop the stock to the chart’s primary interface to the right (see the second image below). Alternatively, if investors wish to view all the instruments available with FP Markets, they can right-click on the Market Watch and select ‘Show All’.
Placing buy and sell orders is usually done through MT5’s primary order window (F9). As you can see from the image on the left below, the order window permits the investor to enter several trading parameters, such as order type, trading volume, as well as stop-loss and take-profit levels. Some traders, nevertheless, favour the one-click trading feature (Alt+T – see image on the right below). Although this enables traders to enter with ‘one-click’, provided the trading volume is already set, the drawback is that it only allows market orders and does not permit the inclusion of risk-management parameters.
Share CFDs:
The company’s Q3 24 earnings report (released on 23 October) announced that sales grew by nearly 6.0%, with the year-on-year results showing an increase to US$9.8 billion. Earnings Per Share (EPS) also beat analysts’ estimates at US$1.15, with operating margin up 18.5% from 17.2% recorded in Q3 23. However, the company’s free cash flow margin decreased to 18.3%, down from 22.2% in Q3 23.
The company’s revenue growth is impressive, with EPS surpassing its peers, particularly over the last two years. Additionally, its current share price carries a weighty forward P/E ratio (Price to Earnings) of 36.0, indicating that investors expect the company to continue growing strongly and may be worth adding to the watchlist.
Regarding the charts, there is no denying that GE stock is entrenched in an uptrend, and recent price action shows a trendline support combination was recently tested (taken from US$180.33 and US$105.70). This has seen a modest bullish reaction and could lead the stock to test highs of US$184.89 (26 November). Conservative investors will also likely position protective stop-loss orders beneath neighbouring trendline support, drawn from the low of US$133.90.
The General Electric Company sells shares to fund growth and fulfil other business obligations. Investing in shares of the General Electric Company entitles investors to partial ownership in proportion to the number of shares purchased. Physical shares are traded on formal exchanges, such as the New York Stock Exchange (NYSE).
When investors buy company shares in the secondary market, in addition to the potential for capital appreciation (dependent on the company’s performance), they may be entitled to dividend payouts and receive voting rights.
Futures and options are types of leveraged financial derivatives which derive their value from the underlying asset’s performance – in this case, shares of GE. While both futures and options allow investors to buy and sell stocks at a predefined price for a future date, they work slightly differently.
A futures contract creates an obligation for both the buyer and seller. The buyer must buy the underlying asset at the expiration date at the predetermined price, and the seller is obligated to sell. Still, most futures contracts are cash-settled before the expiration date. An options contract bestows a similar obligation on the option seller (the writer). Yet, the buyer of the option has the right but not the obligation to buy or sell the underlying asset. An option buyer pays a premium to the option seller for this right.
ETFs are designed to track a broad selection of market indexes traded on stock exchanges. Bought and sold like regular stocks, ETFs provide a way to invest in a diverse portfolio at a lower cost than buying individual investments. They are often recommended for beginners who want exposure to the stock market.
While some ETFs track single stocks, most investors favour passively managed ETFs (those that track a market index). It must be noted that although some ETFs have exposure to the General Electric Company, they will not precisely mimic the price movements of the individual stock.
The General Electric Company does pay a dividend. As of writing, the company’s annual dividend yield is 0.64%.
CFDs are derivatives (traded in the over-the-counter market) that allow investors to speculate/hedge on the price movements of an underlying asset without owning it. On the other hand, physical shares are traded on formal stock exchanges and provide ownership rights to investors. Generally, CFD investors also have access to significantly higher leverage options, while Stock investors usually trade with no leverage (a cash account).
GE can be traded on both MT5 and cTrader with FP Markets.
The trading hours for GE are between 16:30 and 23:00 GMT+2 (Monday-Friday).
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