Experience Trading
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Australia and New Zealand Banking Group Holdings Limited (ASX; ticker: ANZ) has a long and colourful history, dating back nearly 200 years. Today, with an employee count of approximately 40,000 and a market value of A$95 billion, ANZ boasts a strong global presence in Australia and New Zealand as well as across Asia, Europe, America, and the Middle East.
The company offers banking and financial services to nearly 10 million customers, including both households and businesses through six divisions: Retail (mortgages, deposits, and home loans), Commercial (asset financing), Institutional (services to government and global institutional customers), New Zealand, Pacific, and Group Centre.
Although CFDs, ‘Contracts for Differences’, have only been available to trade since the late 20th century, they have gained worldwide popularity among retail and institutional investors. CFDs are legally binding agreements between two parties (a buyer and a seller) to exchange the difference in a trading position's opening and closing prices. Gains and losses depend on the underlying asset’s price movement. For example, price appreciation benefits the long party (buy), while a decline would benefit the short party (sell).
CFDs are leveraged derivative products used to speculate and hedge across global financial markets. This means that, unlike physical shares, CFDs have no direct ownership. Rising and falling prices can also be traded on CFDs across individual stocks, such as ANZ, Global Stock Indices, Commodities, Bonds, Exchange-Traded Funds (ETFs), and Digital Currencies.
With the ability to trade on margin, investors can leverage smaller initial investments and increase position size. For example, at the close of trading on 6 September 2024, ANZ closed at A$31.68 per share. To become a partial owner in the company (own physical shares), buying 50 shares of ANZ would mean an initial investment of A$1,584. However, by investing in ANZ Share CFDs with FP Markets, you would only be required to ‘put up’ 20% (margin) of this initial investment to trade an equivalent position size: A$316.80 (A$1.584 * 50 shares).
1. Open an FP Markets Forex and CFD Trading Account
Opening an FP Markets trading account is simple and is usually completed on the same day. Visit the FP Markets homepage and click ‘OPEN LIVE’; this will take you to the Application stage https://www.fpmarkets.com, as shown below.
2. Download your Trading Platform
Once your account has been approved, your login details will be sent to your registered email ID. You can access the FP Markets Client Portal and select your trading platform using these details. As shown below, clients are able to trade on several trading platforms. This guide assumes you will trade on the MetaTrader 5 (MT5) platform.
From the Client Portal, users can update their personal information, fund their accounts, and explore the widely popular Social Trading platform, which allows them to copy successful traders. Additional features include access to the Partners programme and various trading tools.
3. Find the ANZ Ticker
The image below shows that you can locate and add the ANZ ticker in MT5 through your Market Watch (Ctrl+M). The Market Watch lists available bid and ask quotes for all tradeable products with FP Markets.
Type ‘ANZ’ at the bottom of the Market Watch tab and select the stock to be added to the list. Following this, drag and drop the ANZ stock to the main chart’s interface and alter the chart’s preferences to suit your trading style.
4. Place the Buy or Sell Order
Executing buy and sell positions on MT5 is straightforward and can be completed in several ways. One of the most popular ways is pressing F9 to open your order window. The image below (left) displays the order window for ANZ. Here, you can enter your trading parameters, including order type and trading volume, as well as your protective stop-loss value and profit objective.
Another alternative to entering buy and sell orders is the One-Click Trading function (Alt+T). As shown in the image on the right, this feature allows clients (usually shorter-term traders) to enter the market with only the trading volume set. After the trade is active, stop-loss and profit objectives can be configured in your trading terminal (Ctrl+T).
Share CFDs:
Opening and Closing Long and Short Positions –
Up more than +20% year to date, ANZ has been on form in 2024 and recently hit highs not seen since mid-2017. By comparison, the ASX 200 is up +5.4% year to date.
The latest Q3 24 update underpinned the company's share price, with the release highlighting an increase of +2.0% in customer deposits compared to Q2 24. Bank loans and advances also increased by +3.0%, with all divisions seeing growth. Overall, investors appeared to be happy with the release.
As ANZ pays one of the highest dividend yields among the ‘big four’ banks (Commonwealth Bank [CBA], National Australia Bank [NAB], and Westpac [WBC]), it remains a popular stock for income investors.
ANZ continues to outperform this month, up +4.6% month to date.
The trend is favouring buyers at the moment. If price action on the monthly timeframe remains above resistance at A$31.58, this could trigger additional confidence for the stock towards the 2017 peak of A$32.69 (black arrow). Beyond here, the chart shows room to target resistance from A$34.79 and perhaps the all-time high of A$36.96 (red arrow).
Purchasing physical shares means buying a ‘stake’ in a company, such as ANZ. The investor (beneficiary shareholder) becomes a partial owner. Shares are bought and sold on a formal, regulated stock exchange, usually through an investment broker (commonly referred to as the nominee shareholder).
Like CFDs, the price of ANZ can rise and fall; if the company outperforms and the stock’s price rises, the value of your investment will also increase. Investors may also receive dividend distributions and voting rights at annual meetings.
An ETF represents a pooled investment that can be bought and sold just like regular stocks traded on a stock exchange. The ETF fund pools money from investors and invests in different assets, and shares of the fund are then traded. Asset classes can include Forex, Stocks, and Bonds, for example.
Most ETFs are passively managed investments that track the performance of an underlying index. While no ETF primarily tracks the price movement of ANZ, you can invest in sector or equity ETFs, which helps diversify risk and reduce potential losses in your investment portfolio.
1. Does ANZ pay a dividend?
Yes, ANZ pays dividends. As of publication, the company provides an annual dividend yield of 5.64%.
2. What are the major differences between CFDs and physical shares?
In addition to the obvious distinction that CFDs are derivative instruments – meaning investors trade the price movement without taking direct ownership – and physical shares bestow partial ownership, leverage is another key differentiating point. The leverage offered in the CFD market is much greater than that in physical share dealing.
3. Can I trade ANZ on MT4 or MT5?
With FP Markets, you can start trading ANZ on the MT5 trading platform and cTrader.
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