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 MARKET REPORTS |
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Stocks
CFDs - top five shorts and top five longs for the week
Anthony Anderson, MF Global, December 15, 2008
We asked MF Global if we could take a peek into their CFD book for CFD traders’ most popular stocks. Prepared by Anthony Anderson, Head of CFDs, below are the top 5 most popular CFD trades for the week based upon stock price gains and losses and the reasons why.
Telstra has been a favourite stock for CFD traders for some time now. Its high yield is especially attractive as interest rates fall and the cost of CFD funding consequently drops. However the Telstra share price hasn’t managed to hold above the $4.30 level for some time now, leading many traders to short the stock as this target nears.
The undecided fate of Rio and BHP is evident by the volume of activity on both sides of the fence – with some traders keen to go long, while others prefer to short. While firm metal prices and strong offshore markets add confidence to the sector as a whole, the view that Rio may need to raise capital despite announcing job cuts is weighing heavily on the stock. BHP, meanwhile, continues to struggle to spear through the $31 mark, leading to profit taking and shorting close to this level.
MF Global Top five stocks
Prepared by: Anthony Anderson, Head of CFDs
Please note that these are not buy and sell recommendations. They are merely a list of the top trades based upon trader activity, taking into account volume and movement for the previous week. This information does not constitute advice, and is intended as a reference only.
| Ranking |
Stock |
LONG/SHORT |
Reason |
|
no.1 |
RIO Tinto Ltd (RIO) |
Long |
RIO held support and traders have been well rewarded by impressive balance. Job cuts etc stave off capital raising nervousness. |
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no.2 |
Commonwealth Bank of Australia (CBA) |
Long |
Buying support after announces smaller capital raising than had been factored in by many. Some nervousness about announcement of price however. |
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no.3 |
BHP Billiton Ltd (BHP) |
Long |
Firm metal prices amid strong offshore markets add confidence to sector as a whole. Particularly for BHP after dropping RIO bid. |
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no.4 |
Australia and New Zealand Banking Group (ANZ) |
Long |
Some nervousness about a capital raising in the New Year. However stock looks cheap to many CFD traders, capital raising aside. |
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no.5 |
Telstra Corp Limited (TLS) |
Long |
Has been a favourite and trading well for some time now. High yield attractive as interest rates fall and cost of CFD funding consequently drops. |
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| Ranking |
Stock |
LONG/SHORT |
Reason |
|
no.1 |
BHP Billiton Ltd (BHP) |
Short |
Traders taking profit and establishing shorts as stock heads towards $31.00. This is a level BHP has struggled near for months. |
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no.2 |
Telstra Corp Limited (TLS) |
Short |
$4.30 is the level Telstra hasn’t managed to hold for sometime now. On the back of this, some traders keen to short as this target nears. |
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no.3 |
Rio Tinto Ltd (RIO) |
Short |
Shorting on view RIO may still need to raise capital despite announcing job cuts and cost reductions. |
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no.4 |
Newcrest Mining Limited (NCM) |
Short |
Has been massively strong but traders believe overbought at least in the short term. |
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no.5 |
Woolworths Limited (WOW) |
Short |
Still holding below previously mentioned $27.30 mark, but CFD traders playing the $26.00 - $27.00 range rather than aggressively shorting. |
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