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Formerly Raytheon Technologies Corporation, RTX Corporation is a US multinational organisation incorporated in 1934. The company – which works through three business segments: Collins Aerospace (Collins), Pratt & Whitney, and Raytheon – specialises in aerospace and defence for commercial, military, and government customers worldwide.
According to their website, the company supports 90% of all Department of Defence and commercial space launches, which are supported by RTX’s products, and approximately 50% of the world’s population is protected by RTX’s defence products.
With over 185,000 employees worldwide and a market value (market capitalisation) of US$157.43 billion, the organisation prides itself on a highly skilled labour force and attracting (and retaining) the best talent to execute its operations and grow the business.
CFDs, or ‘Contract for Differences’, offer a unique and cost-effective way to access and invest in global financial markets, including Currencies, Bonds, Digital Currencies, Stock Indices, and Stocks, such as RTX. Functioning as agreements between two parties to exchange the difference in a trade's opening and closing prices, CFDs are leveraged, cash-settled products that eliminate the need for physical ownership. This is unlike options and futures contracts, where physical delivery is possible.
Entering a CFD stock transaction, entering long (buy) or short (sell), involves trading the underlying price movement of RTX. As briefly underlined above, with CFD trading, investors can trade the financial markets without taking ownership, as CFDs are derivatives that derive their price based on the underlying asset's performance.
CFDs are unique in that they allow traders to trade stocks' rising and falling prices with leverage. By way of an example, as of writing, RTX's share price is US$117.93. Without leverage, buying 10 shares of this company would cost US$1,179.3. However, with FP Markets, using margin and leverage with a 20% margin requirement, the initial investment value for an equivalent trade (10 shares) in RTX would be US$235.86 (1,179.3 * 0.20).
1. Open an FP Markets Forex and CFD Trading Account
To begin trading RTX Share CFDs with FP Markets, you must open a Forex and CFD trading account. This can be achieved by clicking on the OPEN LIVE tab on the FP Markets website and completing a five-step Account Application, as demonstrated below.
2. Download your Trading Platform
Once the trading account has been approved, login credentials will be sent to your registered email address. You can use these details to access the FP Markets Client Portal, where you can perform a number of tasks, such as updating personal information, discovering the FP Markets Social Trading platform, exploring Trading Tools, and choosing and downloading your selected trading platform, as shown below. For the purpose of this article, we will assume that you trade with MetaTrader 5 (MT5).
3. Find the RTX Ticker
Fortunately, locating the RTX ticker in MT5 (and MetaTrader 4 [MT4]) is straightforward.
This entails opening the Market Watch tab (Ctrl+M), which lists all the tradable products at FP Markets. To add RTX to your Market Watch tab, type ‘RTX’ in the Market Watch’s ‘click to add’ function and select the stock.
With the stock now positioned in your Market Watch tab, drag and drop it to the primary chart interface on the right, creating a live, real-time chart for RTX. Traders can now alter their chart preferences, from background colours to chart types, timeframes, technical indicators, and drawing tools.
4. Place the Buy or Sell Order
Whether you trade using MT4 or MT5, entering buy and sell orders is similar. Assuming research suggests RTX is oversold or overbought, you can buy and sell the stock through MT5’s order window (F9).
Ensuring the Symbol displays RTX’s stock, you can input your trading parameters, such as trading volume, the Stop-Loss and the Take-Profit orders. Once satisfied with the parameters, you can select buy or sell to execute the trade.
Alternatively, with MT4 and MT5, investors can activate ‘One-Click Trading’, as shown below. As its name implies, One-Click Trading allows investors to enter a trade with ‘one click’ after inputting the desired trading volume. However, the drawback to this function is that the investor must enter Stop-Loss values and Take-Profit orders through their trading terminal (Ctrl+T) after the trade is active.
Here are two examples of long and short positions using Share CFDs:
Year to date, RTX is up +40% and is circling all-time highs of US$118.99. Needless to say, it has been a successful year for the stock so far.
According to some desks, earnings per share (EPS) is forecast to grow by +25% per year, with return on equity (RoE) expected to increase by nearly +15% over the next three years. However, the price-to-earnings ratio (P/E) is high compared to its peer average, which could mean the stock is overvalued and due a correction. Technical studies also suggest a possible decline in the stock’s value.
The stock was on fire in July, adding +17% and recording another fresh all-time high. However, interestingly, the recent leg higher was achieved on declining volume on the monthly chart. Also of note on the monthly timeframe is the Relative Strength Index (RSI), which demonstrates the possibility of negative divergence. As you can see, August’s monthly candle has offered investors little to work with, trading back and forth around recent record highs. This suggests buyers may be running out of gas, and a correction could be on the table.
Across the page on the daily timeframe, buyers and sellers are battling for position around a channel resistance, extended from the high of US$107.82. Given what has been observed on the monthly timeframe, and the lack of buying interest on the daily chart, channel resistance could hold ground and attract profit-taking and possibly kick things lower. Should the stock engulf the higher low formed at US$113.61, this could unlock the door for further downside towards support coming in at US$107.82.
Investing in physical shares of RTX is an alternative investment option. Buying shares in a publicly listed company means partial ownership proportionate to the number of shares purchased, as well as voting rights at the company’s annual meeting and dividend payments.
Of relevance, an investor is generally recognised as the ‘beneficiary shareholder’ if the shares were purchased through an investment broker (‘nominee shareholder’). The investment broker holds the shares on behalf of the beneficiary shareholder.
Like CFDs, futures and options are leveraged derivative products used to trade (and hedge) in the global financial markets.
Futures and options contracts are standardised financial instruments and are generally exchange-traded. If a trade is opened in RTX, physical delivery of the underlying shares is possible with some brokerages (though this is seldom done as most contracts are closed out before the contract’s expiration date). Traders do, however, have the option to roll to back-month contracts.
Furthermore, it is important to be aware that a futures contract obligates both buyer and seller to buy and sell, irrespective of the spot price, while options contracts provide contract holders with the right, but no obligation to buy or sell.
At their core, ETFs are low-cost exchange-traded funds that are usually passively managed and pool investors’ funds together to purchase assets. Investors can buy and sell shares in an ETF just like they can with a company’s shares on a stock exchange.
Ultimately, an ETF can help investors diversify a portfolio, as they tend to invest in a basket of financial products. Notably, then, ETFs with RTX included will not perfectly mirror the price of the stock.
1. Does RTX pay a dividend?
Yes, RTX pays dividends; at the time of writing, the company offers a dividend yield of 2.1%.
2. What are the major differences between CFDs and physical shares?
There are two significant differences between CFDs and physical shares: leverage and ownership. The leverage offered in the CFD market is substantially greater than that available with physical shares. Regarding ownership, CFDs are derivative cash-settled products that trade based on the underlying price movement of the stock, thereby eliminating the ownership issue. Investing in physical shares means the investor will become a partial owner.
3. Can I trade RTX on MT4 or MT5?
With FP Markets, you can trade RTX via CFD pricing on MT5 and cTrader. Most traders opt for MT5.
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