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The National Australia Bank (ASX: NAB) is one of the four biggest banks in Australia, with a market capitalisation of AU$116.98 billion. The bank was formed in 1982 through a merger of the National Bank of Australasia and the Commercial Banking Company of Sydney.
The financial group operates around banking services, wealth management services, international capital markets, and its subsidiaries include UBank and Bank of New Zealand. Additionally, the bank has a global presence with branches in the US, UK, and Asia and employs more than 38,000 people.
A Contract for Difference (CFD) lets you trade on the price changes of financial instruments without owning them directly. As a derivatives product, CFDs allow you to trade various assets, such as Forex, Commodities, Bonds, ETFs (Exchange-Traded Funds), Stock Indices, and individual Stocks.
CFDs are also leveraged products, allowing investors to control larger positions with smaller initial investments, referred to as margin. For example, NAB’s current share price is AU$38.65, and buying 100 NAB shares would cost you AU$3,865. With FP Markets, you can invest in NAB Share CFDs with a 20% margin requirement. With a 20% margin requirement – referred to as your 'initial margin' – you can open an equivalent CFD position of 100 NAB shares with AU$773 (AU$3,865 * 0.2).
1. Open an FP Markets Forex and CFD Trading Account
Various FP Markets trading platforms offer NAB Share CFDs, including MetaTrader 5 (MT5) and cTrader. Opening a trading account is easy and often approved within a few hours.
Go to FP Markets' main webpage and click 'Open Live' to complete your application, as shown below.
2. Download your Trading Platform
Once your account is approved, you will receive an email containing your login details in your registered email ID. After that, you will be able to access the FP Markets Client Portal, from which you can download and install the platform.
3. Find the NAB Ticker
Finding the NAB ticker is simple. Assuming you're using MT5, press Ctrl+M to access your ‘Market Watch’ and type 'NAB' in the 'click to add' function. This will create an extra row for the NAB stock. You can then drag and drop the ticker to the chart's interface to create a real-time NAB chart. You should now be able to customise the chart according to your preferences, everything from background colour to technical indicators.
4. Place the Buy or Sell Order
Once you have researched the stock, usually through technical analysis, fundamental analysis, or a combination of both, you can place your buy or sell order. Upon pressing F9 in MT5 (one of the many ways), a stock order window will appear, as shown below, where you can set the volume, stop-loss order, etc., and then execute the position by pressing either ‘Buy’ or ‘Sell’.
An alternative process to buying and selling a stock CFD is through One Click Trading' (Alt+T). This will allow you to execute a position in the stock quickly. However, while you can enter the trading volume for a trade with this feature, setting stop-loss and take-profit orders is only possible after the trade is executed in the trading terminal (Ctrl+T).
Examples of long and short positions in Stock CFDs:
National Australia Bank reported an unaudited statutory net profit of AU$1.90 billion and an unaudited cash earning of AU$1.75 billion for Q3 2024. Despite strong gains, the company saw a 1% decrease in revenue. In the half-yearly report released earlier, the company noted that revenue decreased by 3.7%.
On the positive side, the bank’s net interest margin remained stable in Q3 24, with small deductions from lending competition and deposit mix, which were counterbalanced by the advantages of a higher interest rate environment.
Andrew Irvine, NAB CEO, stated: 'Our Q3 24 result reflects a more stable operating environment and benefits from the consistent execution of our strategy. Lending balances rose 1% over the June quarter, supported by 3% growth in Australian SME business lending as we continue prioritising growth in our SME franchise. In Australian home lending, our growth was sub-system at 1%. Balancing returns and growth in this dynamic market will remain important. Deposit growth is an ongoing focus and was 1% across Business & Private Banking and Personal Banking over Q3 24'.
Irvine also noted that NAB had delivered further efficiency benefits this quarter, which helped manage costs while investing in long-term sustainable growth. The company has planned to continue targeting productivity savings of approximately AU$400 million in FY24 and expects cost growth to be lower in FY24 than in FY23.
As seen from NAB’s daily price chart, it's currently moving in an uptrend; however, albeit briefly trading above its 52-week high of AU$38.85, reached on 1 August 2024, price has fallen sharply recently.
According to chart studies, recent downside could lead to further losses towards the 50-day Simple Moving Average at AU$36.77, followed by a possible test of resistance-turned-support between AU$34.49 - AU$35.34.
Apart from trading CFDs, investing directly in NAB shares is another option. When you buy physical shares, you’re buying a part of the company, which means you become a partial owner, and your returns are based on the company's performance.
When you purchase physical shares, you generally do so through an investment broker (one of the common methods), who acts as the 'nominee shareholder'. At the same time, you, the investor, are the 'beneficiary shareholder’ and may receive dividends and exercise voting rights.
Exchange-traded funds (ETFs) are investment funds that are freely traded on a stock exchange, just like regular stocks. They are bought and sold during market hours and offer a range of assets, similar to Index Funds or Mutual Funds, which can help with diversification. Most ETFs disclose their holdings daily, giving traders transparency and flexibility.
However, it should be noted that by investing in an ETF that lists NAB, you will not be able to mirror the exact price movements of NAB.
1. Does National Australia Bank pay a dividend?
Yes, National Australia Bank pays dividends. At the time of writing, the company offers a quarterly dividend yield of AU$0.42.
2. What are the major differences between CFDs and physical shares?
There are two major differences. First, when you buy physical shares, you own a portion of the company. On the other hand, CFD investing involves trading an asset's price movement without actually owning it. CFDs can also be easily sold short.
Second, CFDs offer higher leverage, whereas physical shares involve much less.
3. Can I trade National Australia Bank on MT4 or MT5?
With FP Markets, you can trade National Australia Bank via CFD pricing on MT5 and cTrader.
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