Experience Trading
on the Go
on the Go
Reading time: 10 minutes
Founded by Henry Ford in the late 19th century, the Ford Motor Company (ticker: F) is a US-based auto manufacturer providing practical and affordable cars, with its first Model T launched in 1908 (the car cost just US$260 at the time of release).
As of writing, Ford, with nearly 180,000 employees worldwide, is one of the world's top 500 most valuable companies, according to market capitalisation (US$41.4 billion). The company’s primary operations consist of manufacturing and selling various vehicles, from Ford Explorers to commercial vans like the Ford Transit, a staple across the Ford production line for many years.
The company's long-term success can be boiled down to simple yet effective principles: a reputation for affordable prices while maintaining quality standards, design reliability, a diverse range of vehicles, innovative practices, and good marketing.
Contracts for Differences (CFDs) are a cost-effective way of trading the stock market (and other financial instruments). They are designed as contracts between two parties to exchange the difference between a position's opening and closing prices. Importantly, CFD trades are always settled in cash, irrespective of the underlying instrument traded.
With CFDs, traders do not take physical ownership of the stock; in this case, if a trader enters a buy position (long) in Ford, they trade the underlying price movement of the company’s share price, speculating that price will rise. Shorting stocks (a sell position) is also straightforward in the CFD market.
Another key attribute of the CFD market is the ability to employ leverage. CFD traders can leverage their position size beyond their account equity by trading on margin. For example, an unleveraged long position in Ford at a share price of $25 for 1,000 shares would cost $25,000. Be that as it may, investing in a Ford CFD with FP Markets has a margin requirement of 10%. For example, entering a long position in Ford at $25 for 1,000 shares, with a margin requirement of 10%, the trader would need to ‘deposit’ 10% of the notional position size: $2,500 (25,000 total position size * 0.10). This margin will allow the CFD trader to trade a position equivalent to $25,000 (1,000 shares).
1. Open an FP Markets Forex and CFD Trading Account
Ford Share CFDs are offered through various FP Markets trading platforms, including the widely popular MetaTrader 5 (MT5) and cTrader.
To open an FP Markets trading account, the process is simple and is often approved within a few hours. Click ‘OPEN LIVE’ on the main webpage to begin the account application, as exhibited below.
2. Download your Trading Platform
Once the FP Markets Team approves the account, you will receive an email with the login details at your registered email address.
You can use these to access the FP Markets Client Portal and download your preferred trading platform, as shown below.
3. Find the Ford Ticker
Finding the Ford ticker with MT5 is a straightforward process.
Within the Market Watch (Ctrl+M), type Ford in the ‘click to add’ function, and this will create an extra row for the Ford stock. After this, you can drag and drop the stock to the chart’s interface, automatically creating a live, real-time chart for Ford. At this point, traders can alter the chart preferences to suit their needs, ranging from background colours to chart types, timeframes, technical indicators, and drawing tools.
4. Place the Buy or Sell Order
Once you have researched the stock through technical analysis, fundamental analysis, or a combination of the two methods, you can place your buy or sell order.
In MT5’s trading platform, buying or selling a stock CFD can be achieved in several ways. You can press F9, which will open the stock’s order window. Ensuring that the symbol is correct – Ford – the trader can choose between Market Execution or Pending Order, Volume, as well as the values you wish the protective Stop-Loss and Take-Profit orders to be set at (below).
An alternative to buying and selling a stock CFD is activating ‘One Click Trading’ (Alt+T). This allows market participants to essentially execute a position in the stock rapidly. With this feature, however, you can only input the trading volume for a trade; no secondary confirmation is necessary with this process. You also need to consider that with One Click Trading, setting stop-loss and take-profit orders can only be done after the trade is executed (this will need to be done in the trading terminal [Ctrl+T]).
Below, you will find examples of long and short trades in stock CFDs:
Ford's second-quarter earnings were released on 24 July, but they fell short of market expectations and triggered a -14% decline at the open of trading on the following day. By the end of the trading session, the stock was down nearly -20%, marking the company’s worst trading day since 2008 and one of the worst performers in the S&P 500.
However, while earnings were not cheered among the investing community, several trading desks remain bullish about the stock’s share price. Notwithstanding, Ford is one of the largest automotive manufacturers in the world and sells a wide selection of vehicles. It is one of the best-paying dividend stocks with a share price under $20, with a strong cash and optimal liquidity position. On top of this, more than 40 hedge funds are invested in Ford, valued at over US$1.5 billion.
Technical studies highlight the potential for both upside and downside in the stock, depending on how price action behaves between support and resistance on the daily timeframe.
Based on the charts, the monthly timeframe for Ford shows July ended the month down nearly -14%, with the stock down -6.4% month to date. However, price action is nearing the lower edge of a falling wedge pattern (from the low of $10.61), accompanied by support from $9.46.
From the daily timeframe, you will see price action has already responded from a support area between $9.52 and $9.94 (just ahead of the monthly support). Still, overhead resistance is nearby in the form of ascending resistance, extended from the low of $9.63.
Therefore, the charts suggest that attention will be on the daily timeframe’s ascending resistance. A break above there could see follow-through buying to daily resistance at $11.16. Alternatively, defending the ascending resistance line suggests that sellers may take control and test the limit of monthly support.
Share dealing reflects buying and selling physical shares through an investment broker. So, if you purchase shares of Ford, you will become a ‘part owner’ of the company in proportion to the number of shares purchased; these will usually be ‘common shares’, though ‘preferred shares’ are also frequently purchased.
By purchasing shares, you will become the ‘beneficiary shareholder’, and the investment broker will be the ‘nominee shareholder’. The amount invested in the company’s stock will fluctuate according to the company’s performance. The investor can also receive dividend payments and have voting rights.
The futures and options market provides access to leveraged financial derivatives, which are generally exchange-traded. It is important to note that investing in futures or options contracts allows for physical delivery of the underlying asset (though this will depend on the broker).
Contracts are also standardised to ensure transparency, detailing the contract’s expiration date, the quality of the underlying asset, the quantity, and delivery specifics.
Purchasing a call option offers the contract holder the right but not the obligation to buy a specified number of Ford shares at a specific price (the strike price) at (or before, depending on the option type) the contract’s expiration date. The contract holder must pay a call seller a premium to purchase a call option.
ETFs pool funds from investors to purchase various investments, which tend to include stocks, bonds, and commodities. Traded on a stock exchange, just like a publicly listed company, ETFs are bought and sold during exchange hours.
The majority of ETFs are passively managed, designed to mimic the performance of an index (passive ETFs), allowing investors to invest in a large number of companies without needing to purchase individual companies, thus helping to diversify risk exposure. As a result, the performance of Ford’s stock and ETFs is unlikely to be the same.
1. Does Ford pay a dividend?
Yes, Ford pays dividends; at the time of writing, the company offers a dividend yield of nearly 5.0%.
2. What are the major differences between CFDs and physical shares?
There are two primary differences.
First, physical shares involve ownership of the stock – you own a portion of the company as a shareholder – while in CFD trading, you trade the underlying price movement on that stock and never take ownership (CFDs are always cash-settled transactions).
Second, CFDs and physical shares differ in terms of leverage. CFDs offer much higher access to leverage, while physical share dealing is generally unleveraged (though leverage is available, it is much smaller than what you get with CFDs).
3. Can I trade Fordon MT4 or MT5?
With FP Markets, you can trade Ford via CFD pricing on MT5 and cTrader. Most traders opt for MT5.
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 - 40832
