LONDON, August 8, 2012 /PRNewswire/ --
Shares in Standard Chartered plunged as much as 22% following accusations by US regulators of business dealings with Iran just before close of trading on Monday, August 6.
In the following CFD trading guide, we look at what has caused the fall and how you could potentially profit through a CFD trading account from City Index.
Standard Chartered Branded 'Rogue Institution'
Earlier this week, Standard Chartered bank was branded a 'rogue institution' by US regulators following claims that it hid transactions for 'Iranian financial institutions' that had been subject to US economic sanctions.
Standard Chartered reacted by denying the allegations by the regulator.
Between 2001 and 2010, it has been reported that as many as 60,000 transactions had been hidden.
Standard Chartered Shares Plunge 22%
Following the allegations by US regulators, shares in the bank plunged by as much as 22% by close of trading on Tuesday, August 7, before staging a temporary rebound during early trading on Wednesday, August 8.
In a market that both rises as well as falls, you can trade CFDs with CFD trading provider City Index.
Below, we offer you an introduction to trading CFDs and how you could take a position on Standard Chartered's share price regardless of whether it rises or falls.
Introduction to CFD Trading
Trading CFDs [Contracts for Difference] is an alternative to traditional forms of trading as you do not own the underlying instrument.
Instead, you take a position on the future price movement of your chosen market, such as the Standard Chartered (LSE) share CFDs. CFDs are an agreement between two parties to exchange the difference between the opening and closing price of a contract.
How to Trade CFDs on Standard Chartered Shares
Through your CFD trading account you can take a position on Standard Chartered's share price - presented as Standard Chartered (LSE) CFD within the City Index CFD trading platform.
In the event you expect the bank's share price to fall further - you can go short and sell the Standard Chartered (LSE) CFD market. Alternatively, if you expect the bank's share price to rise - you can go long and buy the Standard Chartered (LSE) CFD market.
If the market moves in favour of your position (ie if you had gone long and it rises or if you had gone short and it falls), you will net a profit*, however, if the market moves against your position, you will incur a loss that could exceed your initial deposit.
With this in mind, it is imperative that you manage your CFD trading risk using the various tools available through the City Index website.
Start Trading CFDs Online
It's easy to start trading CFDs online. Simply apply for an account today and soon you could be taking a position on popular markets such as indices, shares, currencies and many, many more.
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*CFD trading is exempt from Stamp Duty in the UK. However, tax laws are subject to change. Seek independent advice if necessary.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.
CFD trading is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
SOURCE City Index