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Alright you American autists, here's a gains post from the UK across the pond - listen up because it's pretty incredible, managed to screw over our broker to turn ~£8k into £98k / $128k USD by reading the small print, true u/fuzzyblankeet style.submitted by mppecapital to wallstreetbets [link] [comments]
Unfortunately, we don't have options trading, commission free robinhood which crashes, or any other US based degeneracy, but instead we British chaps can trade "CFDs" ie. 'contracts-for-difference', which are essentially naked long / short positions with a 10-20% margin (5-10x leveraged), a 'holding cost' and you could theoretically lose more than your initial margin - sounds like true wallstreetbets autism, right? Well grab a lite beer (or whatever you lite alcoholic chaps drink over there) and strap in for this stuff:
So, CMC Markets, a UK based CFD brokerage, wanted to create a West Texas Intermediate Crude Oil 'Spot' product, despite WTI contracts trading in specific monthly expirations which can thus have severe contango effects (as all of you $USO call holders who got screwed know) - this was just a product called "Crude Oil West Texas - Cash", and was pegged to the nearest front-month, but had no expiry date, only a specific holding cost -> already a degenerate idea from their part.
So in early April, just before when the WTI May-20 expiry contract 'rolled' at **negative** $-37, the "WTI Cash" was trading at $15 at the time, but the *next* month June-20 expiry was still $30+ we (I am co-running an account with an ex-Goldman colleague of mine) simultaneously entered into a long position on the "WTI - Cash" product, and went short on the "WTI Jun-20 expiry", a pure convergence play. Sure enough, the June-20 tanked the following week, and we made over £35k, realised profits. But meanwhile the May-20 also tanked, and we were down £28k. But rather than realise this loss, we figured we could just hold it until Oil prices recover, and profit on both legs of the trade.
However, CMC Markets suddenly realised they are going to lose a lot of money with negative oil prices (Interactive Brokers lost $104m, also retards), so they screwed everyone holding the "WTI - Cash" product trading at $8 at the time, and pegged it to the December 2020 expiry trading at $30, with a 'discount factor' to catch up between the two.
Now fellow autists, read the above email and try to figure out what the pure arbitrage is. CMC markets will charge us a 0.61% **per day** holding cost (calculated as the 10x levered value of whatever original margin you put up, so in our case £8k*10x=£80k*0.61% = £500 per day, £1.5k on weekends for extra fun) on our open positions, but also "increase" the position value by 0.61% per day vs. the **previous day's** WTI - Cash value. Got it yet? No? Still retarded? Here's where maths really helps you make tendies:-> If your 'cost' is fixed at 0.61% of your original levered position, but your 'gains' are 0.61% of the previous day's position, then your gains will be ever increasing, whereas your costs are fixed.
So we added some extra £££ (as much as we could justifiably put into a degenerate 10x levered CFD account) and tried to see if it works. Long story short, it does. At this point in July we were making **over £1k per day on a £8k initial position*\* regardless where the WTI Dec-20 fwd moved.
Unfortunately, eventually CMC markets realised what utter retards they were, and closed down the arbitrage loophole, applying the holding costs to the previous day's value. But not before we turned £8k into £98k, less holding costs.
Long story short, puts on $CMCX they're total retards, and given what a startup robinhood / other brokerages are, never assume that only they are the ones taking your tendies away, sometimes you can turn the tables on them!
Following the “permanent temporary” measures against binary options and CFDs (contract for difference), the body in charge implements its own set of limitations that simply forbids regulated houses to offer such product in the UK, hence increasing the risk of pushing retails traders towards illegal brokers and outright scams. Fortunately, a new solution is now available to UK traders via a new United Kingdom Financial regulatory ruling.submitted by sinenyoku to u/sinenyoku [link] [comments]
More scrutiny from UK banks about financial transactions, even to binary optionsIn short, banks will have to take more responsibility about the financial transactions they facilitate. This new ruling should lead to the creation of a new code of conduct that will help defrauded people to have their funds recovered by their bank, unless it is proven they acted recklessly.
As a popular Financial blog puts, it, “It is likely that should a bank or credit card company be either impersonated by a fraudster in order to gain money, or trick a client into depositing, and the bank allows the transfer, a client will be able to take recourse.
The broad protection should kick for many online scheme and scams, whether it is fake investment companies, fraudulent binary options brokers or those scammers who promise to help you recover your stolen funds…only to steal from you once again. On the other hands, it means the banks will be more likely to forbid transactions to legit businesses, such as reputable cryptocurrency exchanges or honest smart options platforms.
The regulating bodies and financial institutions are taking a number of measures to prevent financial fraud. Binary options trading, in particular, is being controlled with a greater degree of robustness to protect the unwary general public being drawn into a situation where they suffer financial losses. Many hundreds of people around the world are targeted each day.
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Frequently they are novice investors who are unfamiliar with the markets and do not recognize that the so-called trading platform and its way of working are actually bogus. The individual only realizes the extent of the fraud when eventually when the fraudsters finally decide that there is no more money to be had and shut down the account and promptly vanish without trace.
Spotting Fraudulent Binary Options Broker
Some lawyers in the financial fraud division are very familiar with the pattern of behaviour demonstrated by the fraudulent brokers and the distress caused by their dealings with inexperienced investors. There is a track of record of recovery in relation to financial fraud and has a number of strategies and tactics to compel the fraudulent broker or associated financial service providers to restore funds to those who have been deceived.
Needless to say, the fraudsters are accomplished at hiding their tracks and frequently there are myriad inter-connected limited liability companies, often some are registered in different countries, with some dormant and some active. It is hardly surprising if the complexity of the situation results in a failure to discover a single person who can be challenged and held accountable.
However, there are various channels financial fraud lawyers use when attempting to retrieve money for clients and each avenue is investigated. Whilst an individual may be alarmed and confused at the prospect of navigating through the complex structures that have been deliberately set up to confuse, Financial fraud lawyers are usually quite familiar with strategies fraudsters use, and frequently can steer a course to the recovery of some or all of the lost money.
The step of last resort, legal action, is understandably daunting for a person who often has lost significant amounts of money to the fraudulent brokers. It is fully understandable that such a situation will leave the victim decidedly risk-averse. There have been experiences with class actions against the fraudulent brokers and has developed links with litigation funding organizations in order to offset the risk in respect of class actions.
The lessons that can be drawn from the experiences of those individuals who have had the misfortune of losing their investments to fraudsters are to be extremely cautious. Always consider every offer or investment for at least 48 hours before making a decision, a genuine broker will understand the caution that a new investor will view a proposition.
All investments carry a risk and anything that promises a return on your initial investment seems to be significantly higher than normal it is almost certainly not to be trusted. Do not allow yourself to be hurried into a decision, it is highly unlikely that an authentic broker would try to rush you into an investment, especially if you demonstrated reluctance; their reputation would suffer by such behaviour.
You can now recover all money lost to bitcoin, binary options, cryptocurrency, investment, scam by hiring any one of these Verified Wealth Recovery Experts.
To recover money lost to binary options, forex, bitcoins, cryptocurrency, and investment, get all the information you need here; https://bitcoinbinaryoptionsreview.com/binary-options-uk-scammed-traders-fake-brokers-and-funds-recovery/
IMPORTANT: OVER 75% OF PEOPLE LOSE MONEY WITH CFD TRADING. IF YOU'RE A NOOB, DON'T EVEN THINK OF OPENING A CFD ACCOUNT. TRY MAKING CONSISTENT MONEY SWING TRADING ASX STONKS FIRST. THEN KEEP DOING THAT UNTIL YOU GET BORED AND WANT TO LOSE BIG MONEY VERY QUICKLY. ONLY THEN YOU MAY HAVE WHAT IT TAKES TO TRADE WITH LEVERAGE.submitted by _HeyHeyHeyyy_ to u/_HeyHeyHeyyy_ [link] [comments]
You most likely don't have my discipline and pain tolerance. Or my feel for risk/reward math. On top of this you need markets to play nice and a bit of luck.
I'm no wiz, but I know my strengths and weaknesses. I smell a good setup and prepare accordingly.
Hope you all nail your big opportunity when it shows up. If not, that's okay too. You'll keep getting chances. Be patient. Focus on small wins. Plus there's far more important things in life than being loaded.
How I lost 5k trading CFDs then turned it around
Back in April, I was playing with CFDs and nearly blew up my account. Started with $5k and dropped to almost zero because trading forex with leverage is a very stupid game. This is why IG gives you a demo account. But instead of using the demo account to learn how not to fuck up massively, I was using it to place giant YOLO shorts on US markets.
By being a bit less retarded on the forex trades I clawed back some losses then topped up the account with another $2.5k before starting to open small positions in gold. From 3 to 10 contracts depending on how confident I felt. Then smelling a massive opportunity, I ramped up the leverage by going with much larger positions.
Entering the silver trade
It was only after making decent profits in gold that I dared venture into silver. I wanted to enter silver around $18 but missed the boat after waiting too long for a dip. $20 was still great. Tons of upside left.
Silver is one nasty motherfucker to trade. It's a much smaller market than gold so the swings can be wild. Silver will play along nicely then suddenly fuck you really hard. If you use too much leverage you're basically waiting for your account to blow up. Stop losses will save you, but they can also kill your best trades. I didn't bother with stops for most of the ride because I'm an ASX_bets retard but also because I had ultra high conviction in the $25-27 price target.
Started with 25 contracts. I very nearly missed out on this mini pump. Some might call it luck.
Adding to my silver positions
Increased my position size once I had a profit buffer to protect against sharp drops. It's WAY easier to blow up a CFD account than it appears. When trades are going well you feel like you can keep adding leverage and make millions. But even small swings will kill you if your positions are too big. Discipline is key.
Buying 50 contracts in silver is not the same as 50 contracts in gold because silver moves are 2-4 times bigger. When gold moves 100 points, expect a 200-400 points move in silver. Having an equal mix of gold an silver contracts helped lower the overall volatility of my account.
Anything over 10 contracts in silver is big. You can lose hundreds within minutes. Buy 50 contracts, the price drops $1 and you're $5000 in the hole. I knew when to push and when to hold back. This was EXTREMELY important. I did not get greedy. I was happy to let price moves do most of the lifting.
Started the day with 3k profits. Went to bed that night with big beautiful bhags. 17k
Woke up the next morning with even bigger bhags. 30k
More pump. I added 50 silver contracts that day after a decent drop. Profits now up to around 41k.
Held through the big swings...
Like a proper bitch, Silver dropped another 5% soon after I added those 50 contracts and my 41k profit became 20k very suddenly. But no stop loss and I held firmly. What's a 21k drop when you've been down 35k on BBOZ before. Metals bounced back hard later that evening. Still not selling. High conviction made all the difference here.
Five days later and I was up to 50k profit.
At that point, I felt safe enough to add another 50 contracts.
And it paid off BIG
Both gold and silver keep pumping. Profit now 86k.
Why sell now?
Not selling yet. GV's silver target was $25-27 so I was confident holding through some wild swings.
GV = Gold Ventures https://twitter.com/thelastdegree
A turbo chad from Belgium who made a massive fortune trading options during 2008-2011 when silver went from $9 to $50 before crashing hard. GV is a certified wizard when it comes to timing the gold and silver cycles. Started with his wife's 32k savings and is now worth 18 million EUR or USD, I'm not sure and who cares. GV is pretty low key but commands plenty of respect from other metal traders on Twitter.
Meanwhile GV was on holiday but still shitting money.
GV also has a junior miner portfolio worth several millions. I believe it's true. I went deep into his Twitter history. He was buying heavily into the March crash and some of his picks like AbraPlata have since made 10x. Junior miners are like call options on metal prices with no expiry date but you still need to pick winners and enteexit at the right time.
Magical Six Figure Milestone
Not long after... BOOM! Hit 100k in profit.
When starting, I knew there was potentially 40k-50k to be made from this setup even without playing it perfectly. I would have been okay with 20k.
Start taking profits
Silver was still going strong but I felt it was time to de-risk.
So I started taking profits on both gold and silver around that time.
Okay I'm out
The way silver kept pumping, I knew a big correction was imminent. By 12pm I was completely out with over 110k profit. Home and dry.
I went on with my daily work routine, a bit more relaxed and not checking charts every 5 minutes.
And then metals dumped hard.
There was money to be made on the short side but there was also a strong possibility of shorts being squeezed. So I didn't bother.
After the dump, I had no appetite to get back in with big positions. In hindsight I could have made tons more if I held to $29 but the ride from $24 to $29 is far more risky than $20 to $26. I'm quite okay with my 40x performance. Plus I needed to reset mentally after this rocket ride. More often than not, the best thing to do after a huge trading win is to take a break. Wisdom gained from the BBOZ days :)
Withdrew my initial capital and 90% of the profits from IG. Left around 6k on the account to keep playing.
Feels good to have extra funds to invest with but I also need to set some aside for the monster tax bill next year. You're welcome Australia, and all the JobSeekeJobKeeper leeches.
Hey everyone, check out my insane stats!
That 85% win rate though...
Less impressive when zooming out to include the forex train wreck in April and my more recent metal trades.
https://twitter.com/thelastdegree - already covered above
https://twitter.com/DaveHcontrarian - called the metals and S&P500 bull runs
https://twitter.com/AdamMancini4 - simple yet powerful charts
https://twitter.com/badcharts1 - advanced silver charts
https://twitter.com/graddhybpc - advanced gold and silver charts
https://twitter.com/Northst18363337 - another master of charts
https://twitter.com/bhagdip143 - ultimate master of monster position and making bhags
BTW fuck Facebook groups, you'll hardly learn anything there. Full of losers. Twitter is where the elite traders and big dick fund managers bounce ideas. A solid Twitter list is worth thousands if not millions in the right hands.
Section 1: Investment Universe
About: Invest your money for a fixed period (1 month up to 5 years). Get profit when period is completed
Pros: Reliable profit , Low financial risk, low Islamic risk : covered by a board of Shariah scholars
Cons: Low profit rates.
About: Collective investment - managed by investment company, protected by SA law, typically invests in equities, sukuks and property
Pros: Plenty of choice, Provided by registered Financial Service Providers, Sharia Boards , diversification
Cons: Typically High fees, .
About: Collective investment
Pros: low fees, Provided by registered Financial Service Providers, Sharia Boards , diversification
Cons: only one option in SA, heavily weighted on Resources
About: Pick your own stocks off the exchange
Pros: High profit potential,
Cons: Very Risky, No Islamic oversight (hence need to do your own screening)
About: Tried and test property
Pros: Stable Asset, Tangible, Straightforward, Zakah benefits,
Cons: High capital outlay, expensive legal costs (transfebond registration) , Not very liquid,
About: Customized Wealth management and investments
Pros: Professional advice, custom solution
Cons: Available exclusively to high net worth individuals, Investment advise appears to be fee based
Section 2: Definitely not halal
Section 3: Grey Areas
Section 4: ConclusionI sincerely hope this helps , and encourages to invest in the Islamic world.
NZD / USD CHF / USD CAD / USD RUB / USD THB / USDWith Crypto Trades; Defi.Exchange offers five buying and selling pairs:
BTC / USDT BCH / USDT DASH / USDT XMR / USDT ZEC / USDTOnce created, each exchange accounts has its own strengths, retaining up with the fashion of the Defi.Exchange platform is inevitable. With robust assets and the present day AI era basis, together we are able to achieve all desire; If you've got any questions about Defi.Alternate, do get help below:
Author: cytpoway121 https://bitcointalk.org/index.php?action=profile;u=2202709
A contract for difference is a derivative financial instrument that is based on the price change of the underlying asset. At the same time, it does not grant any rights to the ownership of this asset.Historical notes. Contracts for difference appeared in England in the early 90s to avoid paying stamp duty. Since this way of making deals does not imply owning shares, CFDs were not subject to this tax. Hedge funds were the first who started using this instrument, and a little later it became available for retail traders. Back then, the trading involved only the purchase and sale of the difference in the stock values. Today, brokers offer CFD on almost all commodities.
submitted by bear6233 to u/bear6233 [link] [comments]
One of Spain’s top financial regulators has warned top-tier professional football clubs in the country that their sponsorship deals – including many made with cryptocurrency-related companies – could be “toxic.”
Sports newspaper AS says it has seen a report compiled by the regulatory National Securities Market Commission (CNMV), which calls out a number of La Liga (the men's top professional football division of the Spanish football league system) clubs for possible violations. The regulator says that it could be forced to act – and “put restrictions on La Liga club advertising.”
The media report claims that two clubs, in particular, are under the spotlight – namely Real Betis, whose main shirt sponsor is easyMarkets (which offers crypto trading and crypto CFDs (contracts for differences), and Atlético Madrid, whose shirt sponsor is Plus500, another company that offers crypto trading services.
The CNMV has not singled out crypto trading platforms exclusively, but it has stated that it may look to outlaw sponsorship deals with crypto exchanges and brokerages – as well as online gambling, forex, CFD, stocks and binary options platforms.
The regulator believes that football sponsorship deals involving “complex financial products” could be considered “toxic advertising.”
A large number of La Liga teams have signed sponsorship deals with crypto firms and exchanges in recent years, and although the CNMV’s primary focus appears to be shirt sponsors, the report also makes mention of a range of sponsorship deals involving La Liga club and crypto and financial products-related companies.
Sponsorship deals have already seen La Liga players participate in advertising and marketing events for crypto and other financial services providers, with some platforms offering discounts for fans.
Meanwhile, in nearby Italy, Serie A champions Juventus have co-launched a line of Ethereum-powered digital collectibles on a blockchain platform. The collectibles have been released in conjunction with blockchain provider Sorare, which also has collaboration deals in place with the aforementioned Atlético Madrid, as well as Italy’s AS Roma and Portugal’s Porto.
submitted by MattPetroski to ItalicoIntegralism [link] [comments]
What Is Capitalism?Capitalism is an economic system in which private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market—known as a market economy—rather than through central planning—known as a planned economy or command economy.
The purest form of capitalism is free market or laissez-faire capitalism. Here, private individuals are unrestrained. They may determine where to invest, what to produce or sell, and at which prices to exchange goods and services. The laissez-faire marketplace operates without checks or controls.
Today, most countries practice a mixed capitalist system that includes some degree of government regulation of business and ownership of select industries.
Volume 75% 2:05
Understanding CapitalismFunctionally speaking, capitalism is one process by which the problems of economic production and resource distribution might be resolved. Instead of planning economic decisions through centralized political methods, as with socialism or feudalism, economic planning under capitalism occurs via decentralized and voluntary decisions.
Capitalism and Private PropertyPrivate property rights are fundamental to capitalism. Most modern concepts of private property stem from John Locke's theory of homesteading, in which human beings claim ownership through mixing their labor with unclaimed resources. Once owned, the only legitimate means of transferring property are through voluntary exchange, gifts, inheritance, or re-homesteading of abandoned property.
Private property promotes efficiency by giving the owner of resources an incentive to maximize the value of their property. So, the more valuable the resource is, the more trading power it provides the owner. In a capitalist system, the person who owns the property is entitled to any value associated with that property.
For individuals or businesses to deploy their capital goods confidently, a system must exist that protects their legal right to own or transfer private property. A capitalist society will rely on the use of contracts, fair dealing, and tort law to facilitate and enforce these private property rights.
When a property is not privately owned but shared by the public, a problem known as the tragedy of the commons can emerge. With a common pool resource, which all people can use, and none can limit access to, all individuals have an incentive to extract as much use value as they can and no incentive to conserve or reinvest in the resource. Privatizing the resource is one possible solution to this problem, along with various voluntary or involuntary collective action approaches.
Capitalism, Profits, and LossesProfits are closely associated with the concept of private property. By definition, an individual only enters into a voluntary exchange of private property when they believe the exchange benefits them in some psychic or material way. In such trades, each party gains extra subjective value, or profit, from the transaction.
Voluntary trade is the mechanism that drives activity in a capitalist system. The owners of resources compete with one another over consumers, who in turn, compete with other consumers over goods and services. All of this activity is built into the price system, which balances supply and demand to coordinate the distribution of resources.
A capitalist earns the highest profit by using capital goods most efficiently while producing the highest-value good or service. In this system, information about what is highest-valued is transmitted through those prices at which another individual voluntarily purchases the capitalist's good or service. Profits are an indication that less valuable inputs have been transformed into more valuable outputs. By contrast, the capitalist suffers losses when capital resources are not used efficiently and instead create less valuable outputs.
Free Enterprise or Capitalism?Capitalism and free enterprise are often seen as synonymous. In truth, they are closely related yet distinct terms with overlapping features. It is possible to have a capitalist economy without complete free enterprise, and possible to have a free market without capitalism.
Any economy is capitalist as long as private individuals control the factors of production. However, a capitalist system can still be regulated by government laws, and the profits of capitalist endeavors can still be taxed heavily.
"Free enterprise" can roughly be understood to mean economic exchanges free of coercive government influence. Although unlikely, it is possible to conceive of a system where individuals choose to hold all property rights in common. Private property rights still exist in a free enterprise system, although the private property may be voluntarily treated as communal without a government mandate.
Many Native American tribes existed with elements of these arrangements, and within a broader capitalist economic family, clubs, co-ops, and joint-stock business firms like partnerships or corporations are all examples of common property institutions.
If accumulation, ownership, and profiting from capital is the central principle of capitalism, then freedom from state coercion is the central principle of free enterprise.
Feudalism the Root of CapitalismCapitalism grew out of European feudalism. Up until the 12th century, less than 5% of the population of Europe lived in towns. Skilled workers lived in the city but received their keep from feudal lords rather than a real wage, and most workers were serfs for landed nobles. However, by the late Middle Ages rising urbanism, with cities as centers of industry and trade, become more and more economically important.
The advent of true wages offered by the trades encouraged more people to move into towns where they could get money rather than subsistence in exchange for labor. Families’ extra sons and daughters who needed to be put to work, could find new sources of income in the trade towns. Child labor was as much a part of the town's economic development as serfdom was part of the rural life.
Mercantilism Replaces FeudalismMercantilism gradually replaced the feudal economic system in Western Europe and became the primary economic system of commerce during the 16th to 18th centuries. Mercantilism started as trade between towns, but it was not necessarily competitive trade. Initially, each town had vastly different products and services that were slowly homogenized by demand over time.
After the homogenization of goods, trade was carried out in broader and broader circles: town to town, county to county, province to province, and, finally, nation to nation. When too many nations were offering similar goods for trade, the trade took on a competitive edge that was sharpened by strong feelings of nationalism in a continent that was constantly embroiled in wars.
Colonialism flourished alongside mercantilism, but the nations seeding the world with settlements were not trying to increase trade. Most colonies were set up with an economic system that smacked of feudalism, with their raw goods going back to the motherland and, in the case of the British colonies in North America, being forced to repurchase the finished product with a pseudo-currency that prevented them from trading with other nations.
It was Adam Smith who noticed that mercantilism was not a force of development and change, but a regressive system that was creating trade imbalances between nations and keeping them from advancing. His ideas for a free market opened the world to capitalism.
Growth of Industrial CapitalismSmith's ideas were well-timed, as the Industrial Revolution was starting to cause tremors that would soon shake the Western world. The (often literal) gold mine of colonialism had brought new wealth and new demand for the products of domestic industries, which drove the expansion and mechanization of production. As technology leaped ahead and factories no longer had to be built near waterways or windmills to function, industrialists began building in the cities where there were now thousands of people to supply ready labor.
Industrial tycoons were the first people to amass their wealth in their lifetimes, often outstripping both the landed nobles and many of the money lending/banking families. For the first time in history, common people could have hopes of becoming wealthy. The new money crowd built more factories that required more labor, while also producing more goods for people to purchase.
During this period, the term "capitalism"—originating from the Latin word "capitalis," which means "head of cattle"—was first used by French socialist Louis Blanc in 1850, to signify a system of exclusive ownership of industrial means of production by private individuals rather than shared ownership.
Contrary to popular belief, Karl Marx did not coin the word "capitalism," although he certainly contributed to the rise of its use.
Industrial Capitalism's EffectsIndustrial capitalism tended to benefit more levels of society rather than just the aristocratic class. Wages increased, helped greatly by the formation of unions. The standard of living also increased with the glut of affordable products being mass-produced. This growth led to the formation of a middle class and began to lift more and more people from the lower classes to swell its ranks.
The economic freedoms of capitalism matured alongside democratic political freedoms, liberal individualism, and the theory of natural rights. This unified maturity is not to say, however, that all capitalist systems are politically free or encourage individual liberty. Economist Milton Friedman, an advocate of capitalism and individual liberty, wrote in Capitalism and Freedom (1962) that "capitalism is a necessary condition for political freedom. It is not a sufficient condition."
A dramatic expansion of the financial sector accompanied the rise of industrial capitalism. Banks had previously served as warehouses for valuables, clearinghouses for long-distance trade, or lenders to nobles and governments. Now they came to serve the needs of everyday commerce and the intermediation of credit for large, long-term investment projects. By the 20th century, as stock exchanges became increasingly public and investment vehicles opened up to more individuals, some economists identified a variation on the system: financial capitalism.
Capitalism and Economic GrowthBy creating incentives for entrepreneurs to reallocate away resources from unprofitable channels and into areas where consumers value them more highly, capitalism has proven a highly effective vehicle for economic growth.
Before the rise of capitalism in the 18th and 19th centuries, rapid economic growth occurred primarily through conquest and extraction of resources from conquered peoples. In general, this was a localized, zero-sum process. Research suggests average global per-capita income was unchanged between the rise of agricultural societies through approximately 1750 when the roots of the first Industrial Revolution took hold.
In subsequent centuries, capitalist production processes have greatly enhanced productive capacity. More and better goods became cheaply accessible to wide populations, raising standards of living in previously unthinkable ways. As a result, most political theorists and nearly all economists argue that capitalism is the most efficient and productive system of exchange.
Capitalism vs. SocialismIn terms of political economy, capitalism is often pitted against socialism. The fundamental difference between capitalism and socialism is the ownership and control of the means of production. In a capitalist economy, property and businesses are owned and controlled by individuals. In a socialist economy, the state owns and manages the vital means of production. However, other differences also exist in the form of equity, efficiency, and employment.
EquityThe capitalist economy is unconcerned about equitable arrangements. The argument is that inequality is the driving force that encourages innovation, which then pushes economic development. The primary concern of the socialist model is the redistribution of wealth and resources from the rich to the poor, out of fairness, and to ensure equality in opportunity and equality of outcome. Equality is valued above high achievement, and the collective good is viewed above the opportunity for individuals to advance.
EfficiencyThe capitalist argument is that the profit incentive drives corporations to develop innovative new products that are desired by the consumer and have demand in the marketplace. It is argued that the state ownership of the means of production leads to inefficiency because, without the motivation to earn more money, management, workers, and developers are less likely to put forth the extra effort to push new ideas or products.
EmploymentIn a capitalist economy, the state does not directly employ the workforce. This lack of government-run employment can lead to unemployment during economic recessions and depressions. In a socialist economy, the state is the primary employer. During times of economic hardship, the socialist state can order hiring, so there is full employment. Also, there tends to be a stronger "safety net" in socialist systems for workers who are injured or permanently disabled. Those who can no longer work have fewer options available to help them in capitalist societies.
Mixed System vs. Pure CapitalismWhen the government owns some but not all of the means of production, but government interests may legally circumvent, replace, limit, or otherwise regulate private economic interests, that is said to be a mixed economy or mixed economic system. A mixed economy respects property rights, but places limits on them.
Property owners are restricted with regards to how they exchange with one another. These restrictions come in many forms, such as minimum wage laws, tariffs, quotas, windfall taxes, license restrictions, prohibited products or contracts, direct public expropriation, anti-trust legislation, legal tender laws, subsidies, and eminent domain. Governments in mixed economies also fully or partly own and operate certain industries, especially those considered public goods, often enforcing legally binding monopolies in those industries to prohibit competition by private entities.
In contrast, pure capitalism, also known as laissez-faire capitalism or anarcho-capitalism, (such as professed by Murray N. Rothbard) all industries are left up to private ownership and operation, including public goods, and no central government authority provides regulation or supervision of economic activity in general.
The standard spectrum of economic systems places laissez-faire capitalism at one extreme and a complete planned economy—such as communism—at the other. Everything in the middle could be said to be a mixed economy. The mixed economy has elements of both central planning and unplanned private business.
By this definition, nearly every country in the world has a mixed economy, but contemporary mixed economies range in their levels of government intervention. The U.S. and the U.K. have a relatively pure type of capitalism with a minimum of federal regulation in financial and labor markets—sometimes known as Anglo-Saxon capitalism—while Canada and the Nordic countries have created a balance between socialism and capitalism.
Many European nations practice welfare capitalism, a system that is concerned with the social welfare of the worker, and includes such policies as state pensions, universal healthcare, collective bargaining, and industrial safety codes.
Crony CapitalismCrony capitalism refers to a capitalist society that is based on the close relationships between business people and the state. Instead of success being determined by a free market and the rule of law, the success of a business is dependent on the favoritism that is shown to it by the government in the form of tax breaks, government grants, and other incentives.
In practice, this is the dominant form of capitalism worldwide due to the powerful incentives both faced by governments to extract resources by taxing, regulating, and fostering rent-seeking activity, and those faced by capitalist businesses to increase profits by obtaining subsidies, limiting competition, and erecting barriers to entry. In effect, these forces represent a kind of supply and demand for government intervention in the economy, which arises from the economic system itself.
Crony capitalism is widely blamed for a range of social and economic woes. Both socialists and capitalists blame each other for the rise of crony capitalism. Socialists believe that crony capitalism is the inevitable result of pure capitalism. On the other hand, capitalists believe that crony capitalism arises from the need of socialist governments to control the economy.
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Traders have to understand the differences and similarities between a Contract for Difference (CFD) and forex. While each of these can prove to be beneficial during speculation in their own way, traders may choose to use just one rather than both in certain situations. In this guide, we’ll explore what CDFs and forex are, how they differ, and how they’re similar. By the time you reach the ... Likewise, when a trader purchases a CFD contract on the FTSE 100, the trader is not actually owning the stocks in the FTSE index, but rather is speculating on its underlying price. In many ways, forex is simply another kind of CFD. Differences of CFDs and Forex. The main differences between CFD trading and Forex trading is that CFD trading involves different types of contracts covering a ... A contract for differences (CFD) is a marginable financial derivative that can be used to speculate on very short-term price movements for a variety of underlying instruments. When it comes to market speculation, Contract for Difference, or CFD, is an interesting option. A CFD occurs when a buyer and a seller create a contract to trade an asset. At the time of the contract creation, the asset will have a set value. Then, when it’s time to end the trade, the seller will pay the buyer or the buyer will pay the seller, depending on whether or not the current value of ... First off, CFD stands for Contract for Difference. The clue is in the name here. CFDs are agreements between the trader and their broker to pay the difference between the opening and closing price of an asset. The Basics of CFDs. CFDs essentially allow you a great deal of flexibility as a trader which you may not otherwise have had access to ... CFD (short for Contract For Difference) is a kind of a contract between a buyer (usually a trader) and a seller (broker) that stipulates that one party will pay the difference between the current value of an asset and its value at contract time to another party. The party obliged to pay is determined by comparing the direction of the actual price movement with that agreed in the contract. They are very similar but there is a small difference. Cash Forex is the rate right now, spot Forex is the rate for delivery in 2 days. The latter factors in the cost of financing the respective currencies for 2 days. Forex traders will nearly always be trading the spot market’s price. Traders will do this through their Forex broker. As part of its service, all Forex brokers will provide the ...
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123CFD is a free online community for all Contracts for Difference (CFDs) Traders. We cover Contract for Difference (CFD) Trading, Spread Betting, Strategies and Techniques. We aim to have the ... Everyday experienced traders are moving from futures and forex trading to CFD’s. New traders are learning how easy it is to begin trading CFDs and why it req... CFD Trading Examples. http://www.contracts-for-difference.com/cfd-trading-examples.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE Let's take some CF... A super tutorial highlighting the essential features of contracts for difference. For more material on CFDs for middle and back office operations, visit http... CFD stands for Contract for Difference. It is trading to profit from price movement without owning the underlying assets like stocks, forex, commodity or futures.It is an alternative to ... Contracts For Difference (CFD) Essentials - Duration: 9:01. ... 12:00. Learn The Concept Of Support & Resistance for CFD and Forex Trading With Barry Norman - Duration: 45:19. Barry Norman's ... Ever wondered what is Contract for Difference (CFD)? Choon Kit, a Phillip CFD Dealer, bring us through the intricacies of CFDs. What is it exactly? How do yo...