The Beginner’s Guide to Trading Standard Life Shares

To trade Standard Life shares, either you can use one of the traditional stock brokerage firms, or a CFD service. We will look at the pros and cons each of these approaches.

Standard Life: Key Stats and Background Information

Standard Life shares are priced currently at £383.60 after it opened the day at £388.40. As of 04/06/2017, Standard Life has 1,979 million shares available, which brings their market cap to £7,593 million.

Thanks to its market cap, Standard Life is the 58th biggest stock on the FTSE 100 index by market capitalization. In the last 30 days, Standard Life’s share price has increased by 1.19%, from £379.10. In the last 90 days, the share price has decreased by 4.10%, from £400.00 to its current price of £383.60.

With regards to trading activity, Standard Life is the 31st most actively traded stock on the FTSE100. It has an average of 5,569,943 shares being traded per day.

Standard Life had a profit after tax for the financial year ending 31/12/2015 of £419 million. This profit was a rise from £338 million for the financial year ending 31/12/2014, an overall 24% change in profit after tax.

Standard Life was originally listed on the London Stock Exchange on July 10, 2006. It is tradeable on Monday to Friday between 8:00 am and 4.30pm GMT (UK time).

In 2016, Standard Life paid an 18.81p dividend, which was an increase from 17.45p in 2015.

Pros and Cons to Trading Standard Life shares (SL) as a CFD

A Contract for Difference (or CFD) is a method of trading different types of instruments, such as shares, without needing to own the actual shares. These are some advantages and disadvantages of trading CFDs when compared to using one of the traditional stock brokerages.

Advantages:

• The primary advantage to using a CFD broker is the leverage which they offer to their clients. A trader would then require a smaller account size relative to the size of a particular trade, in comparison to when using a traditional share dealing broker.
• For example, a traditional brokerage offers a 1:20 leverage on Standard Life shares. So, at $383.60, the current price per share, to purchase 50 Standard Life shares without any leverage, the total cost would be £19,180.00. However, by using the leverage of 1:20, a trader would just need an account size of £1,065.56 for placing the trade with a CFD broker
• CFD brokers let traders go short or long. This means that a trader could benefit from the markets rising and falling.
• Usually, CFD brokers don’t charge a commission; rather their fees are included in the amount of the spread.
• CFD brokers that provide the MT4 platform let clients use expert advisors for automating their trading strategies.
• The UK shares purchased as a CFD aren’t liable for the normal 0.5% stamp duty payable on a traditional share purchase (note that tax laws can change and they are subject to individual circumstances).
• Unlike with traditional brokerages that just offer stock trading, CFD brokers provide access to a broad range of instruments, such as stocks, currencies, and commodities.

Disadvantages:

• As we mentioned, leverage can magnify both the losses and the gains. And as is with all trading, traders risk of the markets moving against them.
• Typically, the CFD brokers charge an overnight fee to hold a long position overnight. This overnight fee is basically the cost to borrow the money from the broker for purchasing the shares on margin. If you closed the position on the same day, then there would be no overnight fee. Therefore, this is only a disadvantage if you aren’t an intraday trader or a day trader.
• For example, currently, LCG charges an overnight financing fee of 2.73% for individual equities. This fee means that for the trade above, it would cost a trader £1.43 every day that the position was open. 

For additional information regarding trading stocks as a CFD, check out our guide on “The Basics of CFDs“. It’s important that you remember that leverage works both ways and it will magnify the gains and losses.