Broker Offers

TradeDirect365 Signup Bonus

I’m pleased to announce Online Brokers Australia has an exclusive bonus, with very few conditions (* see below) for anyone opening a new account with TradeDirect365 during the last week of July 2015. I have highlighted this as TradeDirect365 are not a broker that always has promotional offers available, and this one is exclusively provided courtesy of Online Brokers Australia via the links below…

Receive a $30 Welcome Bonus when you open and fund a new account with TradeDirect365 before 31st July 2015

Click HERE to open an account and claim your TradeDirect365 bonus

We are highly impressed with TradeDirect365 and our full review can be viewed here. Trade Direct 365 offers a strong, simple and efficient trading platform, as well as a far cheaper trading cost to traders.

The real difference is brought to the company by their CEO Davin Clarke, who clearly understands the features and functionality that are important. Davin has over 12 years of experience as a full time professional trader, earning his primary income through trading. Davin has extensive experience in trading shares, futures and foreign exchange markets both in Australia and other global markets. His key specialties are FX markets, DAX and SPI trading, which really shows in TradeDirect365’s quality, and best priced products I’ve seen for DAX, SPI and ASX share CFD traders.

TradeDirect365 Advantages
Click HERE to find out more about TradeDirect365

* July 2015 $30 Welcome Bonus for New Accounts Promotion Terms:

  • Promotion closes 31st July 2015
  • Only applies to new clients, referred by Online Brokers Australia opening a live account.
  • One A$30 welcome bonus per household.
  • Clients must deposit a minimum $500 into their account and place a trade before the end of August 2015.
  • Bonus will be applied after the first trade and can be withdrawn after 30 calendar days from the first trade.
  • TradeDirect365 reserves the right to make this promotion unavailable to clients considered to be abusing the promotion by any means.


TradeDirect365 CFD trading reviewed | cheapest fixed spreads

 
RISK NOTICE:
Contracts for Difference (CFDs) are a complex, leveraged financial product and requires a certain level of experience, so may not be suitable for everyone.
CFD trading carries a high level of risk to your capital and can result in losses that exceed your initial deposit. Please ensure that you understand all the risks involved.
If you are considering acquiring any financial product you should obtain and read the relevant Product Disclosure Statement and/or other offer document/s prior to making any financial decision.
If you are unsure of the risks, or have any doubt whether you have sufficient financial resources or experience to trade these products, you should take professional advice before trading.

 

Economy, Interest Rates

Reserve Bank of Australia Balancing Act

How will the Reserve Bank of Australia (RBA) balance the risk of a Sydney housing “bubble” against the otherwise sluggish Australian economy?

Yesterday (Monday 1st June, 2015) Treasury Secretary, John Fraser, declared that Sydney and parts of Melbourne were “unequivocally” a residential property bubble. He not only warned of a bubble, but said there was unequivocal evidence that one existed. This is one of the strongest official warnings I’ve seen of a Sydney, and potentially partial Melbourne, property price bubble, however it must be noted that this is not representative of the rest of Australia’s property market at the time of writing.

These comments follows comments by Greg Medcraft, the usually reserved chairman of the Australian Securities and Investments Commission (ASIC), a couple of weeks ago with warnings about a housing “bubble” in Sydney and to a lesser extent Melbourne.

The RBAs balancing act comes as all other economic signals indicate further rate cuts are more than just a possibility this year, however further cuts to the historic low interest rate may continue to fuel this Sydney residential housing “bubble” at a time when personal debt levels are also at very high levels again.

Interest rate changes are considered a “blunt” monetary policy instrument and therefore the RBA will have to consider the broader Australian economy, as they can’t laser target particular areas of the economy with interest rate changes.
 

So what will they do at todays RBA rate meeting ??

I don’t believe the RBA will drop interest rates at todays June 2015 rates meeting, however given the following economic conditions I do believe we will see a further cut to the historic low rates before the end of 2015

  • the continuing sluggish Australian economy
  • sharp declines in resource-related capital expenditure
  • business investment in Australia contracting at its fastest rate in more than five years and no signs of improvement any time soon (The latest Australian Bureau of Statistics (ABS) Capital Expenditure Survey revealed total real capital expenditure fell by 4.4% and resource-related investment plunged nearly 14% compared with the same time last year. In addition, UBS chief economist Scott Haslem described the latest estimate of investment plans in Australia as “recessionary”, after being “bleak” last time)
  • continued increased unemployment levels which do not appear to have peaked as yet
  • subdued inflation figures and
  • an Australian dollar which although nowhere near prior highs (as I write this article the AUD is a little above 0.76 cents), is still likely to be higher than the RBAs preferred levels.

As always we don’t have a crystal ball, however I do strongly feel the RBA will leave rates on hold today and continue to monitor the effects of prior rate cuts and broader economic factors before the next move on the Australian interest rate.

Economy

Federal Budget 2015 Winners and Losers Ultimate Resource

Are you one of the winners or losers from this year’s budget?

This years federal budget is more subdued than last year’s budget, with small business and national security being the big winners.

Below is the complete source of Australian Federal Budget 2015 reference documents you need to understand Treasurer Joe Hockey’s second budget, and breakdown who are the winners and losers.

Australian Government Budget Official Web Site: includes Transcript of the Treasurer’s budget night speech, overviews, full budget papers, archive of past budgets and much more.

Budget 2015 Winners and Losers: Great visual representation of the 2015 budget winners and losers.

AFR Federal Budget 2015: The Australian Financial Review’s article summarising the winners and losers.

Budget 2015 Cheat Sheet – What you need to know: An excellent article which includes plenty of charts and tables to easily highlight key areas including:

  • Underlying Cash Balance
  • Government Revenue
  • Government Spending
  • Australian Economic Outlook
  • Debt Position.

SMH “Your five-minute budget summary”: Summary of the key budget elements.

AFR Budget Explorer: Take a trip down memory lane with the Australian Financial Review’s interactive Budget Explorer graphic.
Explore this interactive graphic to “see how Labor and the Coalition have managed the federal budget during the past three decades; the economic challenges they have faced; and the reforms they have put in place”. SOURCE: Australian Financial Review

 

INFOGRAPHIC: The budget winners and losers   SOURCE: The Conversation
Budget 2015 Winners Losers Infographic Source: The Conversation
SOURCE: The Conversation

Please let us know if you’ve found some other quality articles and links in the comments below.
 

Australian Federal Budget 2015 Winners and Losers

Economy

What would a Greek default look like?

While Greece continues to struggle to secure a deal on it’s debt obligations, Standard & Poors today (16th April 2015) have further downgraded Greece’s long & short-term sovereign credit ratings to ‘CCC+/C’ from ‘B-/B’, citing worsening economic conditions due to prolonged negotiations between the government and creditors.

“Without deep economic reform or further relief, we expect Greece’s debt and other financial commitments will be unsustainable,” S&P said.

While Greece denies it’s about to default on it’s debt obligations, the CNBC article below looks at what a Greek default may look like…
http://www.cnbc.com/id/102584164

“I think default is inevitable,” Michael Hewson, chief markets analyst at CMC Markets, told CNBC Tuesday.

“Whatever happens, even if they agree some tranche of aid for Greece, its economy is not going to achieve the rate of growth it needs to start paying down the debts. There is no prospect of Greece not defaulting, in my view, and if markets don’t realise this they’re living on another planet.” Source: CNBC

Image Credit: Aris Messinis | AFP | Getty Images

Interest Rates

ASX RBA Rate Indicator

Reserve Bank of Australia

The RBA Rate Indicator shows market expectations of a change in the Official Cash Rate (OCR) set by the Reserve Bank of Australia (RBA). The indicator calculates a percentage probability of an RBA interest rate change based on the market determined prices in the ASX 30 Day Interbank Cash Rate Futures.

What is the RBA Rate Indicator saying today?

As at 9 January 2015, the ASX 30 Day Interbank Cash Rate Futures February 2015 contract was trading at 97.540, indicating an 18% expectation of an interest rate decrease to 2.25% at the next RBA Board meeting. There is also an 82% expectation of “No Change” at the next RBA Board meeting. Source: ASX
The next Official Cash Rate announcement will be on the 3rd of February 2015.

The table below highlights how market expectations of an interest rate decrease at the next RBA Board meeting (February 2015) has evolved in recent days prior to 9th January 2015.

Trading Day No Change Decrease to 2.25%
30 December 78% 22%
31 December 78% 22%
2 January 78% 22%
5 January 80% 20%
6 January 80% 20%
7 January 78% 22%
8 January 80% 20%
9 January 82% 18%

Source: ASX

Reserve Bank of Australia | ASX RBA Rate Indicator

Calculations for ASX Target Rate Tracker (Based on 30 Day Interbank Cash Rate Futures)

The expectation of a rate change by the RBA is calculated by taking into account the number of days the RBA Target Cash Rate is known versus the number of days in the month that it is unknown ie: the number of days before and after the RBA Board Meeting. By incorporating this time factor into a probability equation the following formula can be used to determine current market expectations on whether or not the RBA will change the Target Cash Rate:

rt * n b + {r(t + 1) p + rt(1 – p)} * na = X

Solve for p, where:

p = probability of rate change
X = current yield on 30 Day Interbank Cash Rate Futures
rt = current known Target Cash Rate (%)
r(t + 1) = expected new Target Cash Rate (%)
nb = fraction of month where target rate is known (ie: before RBA official rate announcement), eg: 2/31 for December 2003
na = fraction of month where target rate is unknown (ie: after RBA official rate announcement), eg: 29/31 for December 2003

Source: ASX

Broker News

Happy New Year 2015

Happy New Year 2015 from Best Online Brokers Australia

We are already in 2015 which will be an exciting year for Best Online Brokers Australia.

We launched this new web site in December 2014 and many thanks to those already following our new web site, and on Twitter and Facebook.
We’ll have some fantastic new brokers, offers, trading instruments and much more coming in Q1 2015.

In the meantime I’ll leave you with a couple of great quotes to consider…

“Learn from yesterday, live for today, hope for tomorrow”
~~ Albert Einstein

“The bad news is time flies. The good news is you’re the pilot”
~~ Michael Altshuler

Wishing everyone a very happy, healthy and prosperous 2015 🙂

Broker News

Interactive Brokers to Refund $1.5 Million in Fees & Commissions in Australia

Australian customers of Interactive Brokers (NASDAQ:IBKR) will be reimbursed with the fees and commissions paid to the brokerage for retail margin loans during the period between July 2010 and August 2013.

The Australian Securities and Investments Commission (ASIC) has issued an announcement outlining that Interactive Brokers is preparing to refund more than 3,000 of its Australian customers with the fees and commissions paid to the broker for retail margin loans.
 
Interactive Brokers Australia

Interactive Brokers Australia

The company will refund around $1.5 million to its customers, in addition to paying $100,000 to the Financial Rights Legal Centre, a community legal centre specialising in educating the Australian public on financial services matters.

Interactive Brokers has been engaged in a voluntary undertaking with ASIC since August 2013 when it agreed not to issue nor increase any new or existing margin loans. The company has also wound down its facilities and is currently not offering margin lending facilities to ‘natural person’ clients in Australia.
 
ASIC

ASIC Regulation of Margin Lending

The regulation of margin lending began on January 1st, 2010, with the introduction of the Corporations Legislation Amendment Act, which required issuers of margin lending to be regulated by ASIC through an Australian financial services licence (AFSL). In addition, under the Australian regulatory environment, every client’s creditworthiness has to match his risk profile.

PricewaterhouseCoopers will be reporting on its verification of the refund process to ASIC and IB.

– Read the full ASIC announcement at: http://asic.gov.au/about-asic/media-centre/find-a-media-release/2014-releases/14-336mr-asic-investigation-leads-to-interactive-brokers-refunding-15-million-to-australian-customers/

Broker News, FOREX

ASIC surveillance prompts FX provider to enhance compliance procedures

Following an ASIC surveillance, Calibre Investments Pty Ltd will implement changes to the way it offers FX services to retail clients.

The move is part of ASIC’s crackdown on the FX industry which has resulted in a number of outcomes recently.

ASIC’s surveillance of Calibre, which provides managed discretionary account (MDA) services, raised concerns over the business’s compliance and risk frameworks, their advice to clients and their supervision of representatives.

In response, Calibre has appointed an independent consultant to review its MDA policies and procedures. The independent consultant will report back to ASIC.

The group will also provide new statements of advice to all MDA clients and enhance its compliance department.
Source: ASIC Monday 8 December 2014

Read the full story on ASIC web site

Trading

Will this be the end of trading pits at CME?

Floor trading in the “trading pits” (face-to-face trading) is sadly a dying art, however we do still have examples of this great art… but for how long?

Examples of markets which use this system in the United States are the New York Mercantile Exchange, the Chicago Mercantile Exchange (CME), the Chicago Board of Trade, and the Chicago Board Options Exchange. In the United Kingdom, the London Metal Exchange still makes use of open outcry. Source: Wikipedia

Below is an extract from an interesting article published by Crain’s Chicago Business

What little action remains on CME Group’s downtown trading floor emanates mainly from one corner: the eurodollar options pit.

The trading floor, with 35 pits covering nearly 2 acres, once was the heart of the world’s futures market, with screaming, gesticulating traders setting prices for everything from cattle to soybeans to interest rates. But now about 90 percent of CME’s volume trades on the company’s electronic platform, leaving many pits quiet and rows of desks around them sitting empty.

By contrast, floor traders consistently handle 77 percent of eurodollar options orders. Nevertheless, with CME under pressure to cut costs—its major rivals, Intercontinental Exchange and Eurex, don’t even have trading floors for futures—the last vibrant “open outcry” pit is helping keep the floor open, for now.

“It’s not a question of if, it’s only a question of when,” says Richard Sandor, a former chief economist at the Chicago Board of Trade.

CME Executive Chairman Terry Duffy has made clear he has authority to close the floor anytime. During a November meeting with reporters, he said any pledges to members to keep the pits open lapsed years ago. That point was underscored by CME’s legal victory this year over grain traders who sued the company over unfavorable changes to pit rules.

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