Short selling is effectively – selling what you don’t own – to engage in short selling you need to find a person who owns shares and believes that the share is going to rise. In undertaking short selling, you do think that the price is going to fall. You are effectively “betting against” people who think its going to rise.

The following example should help to illustrate (please note that are differences between naked short selling and covered short selling which are explained in the link at the bottom of this post) :

1. Fred approaches his stock broker and says “I want to short sell NAB at current market rate of $20″
2. The stock broker would approach a large investor who has gone “long” on NAB shares and thinks they are going to rise (i.e. the large investor holds a bunch of NAB shares and thinks that they are going to rise)
3. The stock broker effectively “borrows” these shares from this investor and sells them at the current market rate – deriving a cash sum. The broker is now indebted to the investor for X  number of shares and holds cash for Fred.
4. The stock then falls to $18 and Fred wants to cash out and tells his broker.
5. The broker then uses the money from the sale of the shares “borrowed” from the large investor, and buys them at a rate of $18.
6. This costs $18 per share and the stock broker then gives the large investor the number of shares borrowed.
7. Fred has made $2 and pays a premium to the stock broker, who would have in turn been charged a premium from the large investor.

So a proper illustrate in a practical sense:

1. Fred “borrows” 1000 shares at $20 and immediately sells them at market price earning $20,000
2. Stock falls to $18
3. Fred buys 1000 shares at $18K
4. Fred “returns” the “borrowed” shares to the “borrower”
5. Fred keeps $2K profit
6. Fred’s $2K has a “premium borrowing” charge of 10% – so he has to pay this for “borrowing” the shares – $200 to the company.
7. Fred Nets $2K – $200 = $1,800

Obviously, you have to find an investor who is willing to “lend” the shares. Most big investors buy shares to go “long” not short – so many are “hesitant” to do this. However, the reason they do is that you have to pay a “premium” for “borrowing the shares”. Of course, the rationale is that big investors are in for the “long haul” and short selling is really just to gain from “short term” news. To learn more about short selling and the current affects on the ASX – read this article.

It’s now clear that the markets will not stop falling until either the credits markets show a sign of improving by a flow of liquidity back into the markets, or simply, by equities becoming so cheap – that investors start buying again. With the world banks reducing interest rates in a co-ordinated effort, the credit markets have improved over the last few days but this may be short lived if investors are going to continue to take a “sell-all” attitude.

The big question, of course, on everyone’s mind is just how much further can the market fall ? With the Dow Jones now at the same level it was at in August 2003 – no one is completely certain. What is clear is that in the current market environment, selling is being triggered by fear. Investors like certainty – that is, they like knowing that world markets are improving or declining. Insert “uncertainty” into the equation and you have what we are seeing in the markets now – utter fear. This causes investors to extract their money from the world markets at a rapid rate and cause stocks, which are sound in all other sense, to fall rapidly as large fund and institutional investors start sucking out their money and placing them into “safe” instruments.

This is why the commodity and bond markets have seen such a flurry of action in the last few weeks. Investors are looking for certainty in their investments in a market that is completely uncertain – the only place than can seem to find it, is in government backed bonds and underlying commodities such as gold. Has the market finished declining ? I don’t believe so – at least not until investors stop their incansesent fear driven by uncertainty, and start realising that world bank and governments are trying to do everything to stop the markets eroding. The sooner people start listening, the better of we will all be.

So what does the ban mean?

Well firstly, we have to clarify the difference between naked short selling and covered short selling. Typical short selling is referred to as covered short selling – the practice whereby a trader sells a security that they do not own with the expectation that the value of the securities will decrease allowing them to sell the securities at current market prices and then buy the securities back when they fall in value. With enough value drop, the trader can purchase the securities and ‘cover’ their position for less than they received for selling them earlier. Of course, if the price increases then the trader is required to cover the increase and they lose money. The difference between a ‘covered’ short selling and a naked one is that a naked short sell is selling a stock without borrowing the shares. This creates a position when the seller does not obtain the shares within a specified time period and subsequently fails to deliver on their obligation. This type of short selling typically incites more negative sentiment in a stock.

So basically, ASIC has banned the practice of engaging in short selling for the next 30 days from today by completely banning naked short selling and covered short selling until global markets stabilize.

So what does this mean for the market?

Well, firstly there is no question that it’s going to stabilize the market simply because short selling has always had the compounding effect of spiralling negative market news on a stock out of control. While this is true, I find it a bit rich that the ASX has not placed a ban or restricted the trading of options and warrants in the market since the creation of adverse option positions can have the same effect (although perhaps not as drastically as short selling.)

Overall, I think the decision was the right one and one that ASIC should be applauded for (although *cough cough* they didn’t really have much choice). Evidently, the new restrictions are going to stir up the whole ‘stock lending’ debate and whether hedge funds and large institutional investors should be allowed to profit from the falling prices of shares by engaging in the practice of short selling and charging fees for lending out their clients shares. They argue of course, that the profits are shared with the client and can assist in reducing their management fee’s.

My take on this is that short selling is useful since it help liquidity in the market – but is difficult to regulate and can often result in market manipulation. Think of this way, a big institutional lender places a short sell position on a company which may signify to the market that it knows something about the company that others do not – so the rest of the market starts short selling on the company and the companies stock is shot and in financial freefall. Of course, the company may be perfectly profitable and solvent and have no pending issues – the mere ‘fabrication’ of negative sentiment in a market like the current one will cause a frenzy from investors who are waiting for the next big (or small) company to fall.

So ASIC’s decision makes sense for now – it will be interesting to see what restrictions they enforce once the market stabilises and the 30 days ‘temporary period’ is up.

Trend-Following Systems

Trend-Following Systems are the most common type of system used by system traders and they are typically true to their name. Like with Lagging, or trend following indicators, a trend following system seeks to wait for price movement before executing a trade in direction of the trend. Some examples of trend following systems include both the Band System and the Moving Average System.

Band System

The Band System gets it name specifically from the Bollinger Band Indicator which was developed by John Bollinger. Considering the primary use for the Bollinger Band is measuring the volatility of the security, and it is comprised of 3 separate moving averages, the Band System similar to that of the Moving Average System.

The idea of the system is that when a new high or low occurs, price direction is most likely to continue in the direction of the price breakout. A price breakout is a situation where price breaks above a level of resistance and then continues to increase, or conversely, depicts a situation where price breaks below a level of support and falls lower. What this implies for the Band System is that when price approaches the edge of either the upper or lower bands, a breakout will typically occur. Most trading rules for the Band System are derived off those for Bollinger Bands, such that prices are considered to be overbought when price respects (touches) the upper band, and are considered to be oversold when price respects the lower band.

Moving Average System

The Moving Average System is one of the most commonly used systems to observe price changes in technical analysis. It is Trend Following (or Lagging) System because it based off the moving average indicator which tends to lag price. The Moving Average Indicator is based on the idea that in an up trend, the moving average line will lag price and therefore price will be inclined to move above the line. Equivalently, if the up trend finishes and a down trend starts, then price will be inclined to move below the line.

The Moving Average System is therefore derived off the simple rules used by the Moving Average Indicator itself. Basically, whenever the MA crosses the price line, it implies that you reverse your current position. For example, if you are short and it crosses, then close your position and go long. Equivalently, if you are long and it crosses, close your position and go short.

There are numerous disadvantages of using Trend-Following Systems. Some of these typically include:

• Time Window – Choosing the time window for any trend following system is often difficult because it does involve a subjective component. It is important to fully understand the indicators being used in the system in order to correctly identify buy and sell signals with respect to the time period.
• Whipsaws and Trading Channels – Perhaps the greatest disadvantage with a trend following system its inability to accurately trade during whipsaws and trading channels. Whipsaws are volatile periods of market movement where a clear trend is not evident and price tends to reverse directions quickly and with no consistent pattern. While leading indicators are quite good at handling these types of price movements, trend following systems find it difficult to account for these volatile periods because of their lagging nature. Trading channels are periods of sideways market movement usually confined to an upper resistance bar, and a lower support bar. Since no trending pattern is available, it is hard for trend following indicators to correctly identify entry and exit points in these types of trading periods.
• Lagging Effect – This is a problem which is not just limited to trading systems, but one that is limited to trend following indicators in their entirely. These indicators are not intended to be used in square, flat or sideways trading movement as they lag price and therefore cannot generate accurate signals in highly volatile trading periods.

Reverse-Trend Systems

A reverse trend system is one that involves considerable more risk than a trend following system. This is because there is no specific time to exit trades as the system works on the principle of buying low and selling high. Unlike a trend following system where a specific event must occur to exit a trade, the reverse-trend system only signals entry positions and does not indicate when these positions should be closed. This leaves the trader with a considerable amount of subjective judgement, something that trading systems typically seek to exclude.

Most reverse-trend trading systems use leading indicators as there focal point. This implies that indicators with oscillating movements are usually the best kind of indicators for these types of systems. The majority of entry signals occur on bullish or bearish divergences with the primary goal being to buy low and sell high. Some of the main disadvantages of reverse-trend trading systems include:

• Subjective Component – Perhaps one of the greatest downfalls of reverse-trend systems is the level of developer interpretation during its creation. The more that a system trader relies on their own judgement, rather than that of the system they have created – the more likely they are going to produce failed trades.
• High Risk – There is no specific time to exit trades as the system works on the principle of buying low and selling high. This implies that there is no specific time to exit positions which increases the risk of the reverse trending systems.
• Volatility – Since leading indicators are typically more useful in trading periods, as opposed to trending periods, a higher level of volatility usually occurs. For trading systems, this normally means that it is more difficult to correctly use the system because volatility is so random and will lead to incorrectly generated signals.

Conclusion

In summary, there are numerous factors and components that we have looked at in the development and implementation of trading systems. We have discovered the importance of remembering that Trading Systems are complex pieces of machinery, which must been developed and tested continuously. The more testing and practice that are conducted with the system, then the more smoothly the translation of the system into the real world can occur.

We can reiterate the Basic Rules of any Trading System:

• The system must cover all trading scenarios so that no matter the direction of price movement, the system can determine the appropriate action by itself and does not require subjective intervention.
• Regardless of price direction, complete faith must be in the action of the trading system. It cannot be overruled and should not involve outside judgement.
• All indicators should be stress tested and a multitude of different indicators should be used in the system. All the indicators should be tested on a number of different stocks to ensure that the profit /loss ratio is greater than a 1-1 ratio.
• The system should be simple and straightforward – complexity is not correlated to trading success. A common misconception of many traders is that they feel the more complex a trading system is, the higher the chances they have of getting a profitable return. This is simply not case, and often the best trading systems are based on basic principles and straightforward ideas. The system should be as simple as possible, and the trader should have complete faith in the system they are using.

Some other useful questions that traders may want to ask themselves when developing a trading system include

• What are the Risks of my Trading System?
  • A Trading System must be developed according to the traders risk preferences and investing style. There is no point creating a trading system that is not suitable for you! Ensure that you have limited your risk sufficiently to enable you to enter and exit trades comfortably.
• Will the System make me money?
  • This is often forgotten in all the hype of creating a trading system and is undoubtedly the fundamental aim. There is no point creating a trading system that is not going to be successful, unless of course your tax is too high and you wish to offset it with losses! Try not to look at the dollar profit when judging the success of your trading system, but rather the percent return as this will give you a much more accurate picture of your success rate.
• Are my parameters, indicators, timeframes, prices and settings correct?
  • This is the most difficult question to answer and remains solely in the hands of the trader. Only through experience, dedication and skill can a trading system be developed that will produce profitable trades the majority of the time. It is important to remember that each characteristic of a trading system is just as important as the next one, as they all interrelate in helping you to produce a successful strategy.

In conclusion, while developing a trading system can be difficult work and involve many hours of research and testing, they can also be extremely rewarding to both you and your bank account. It is important to keep in mind your desired goals for the trading system, and why you are developing it. It is even more beneficial if you learn to detach your emotional side from them, and concentrate on what the predefined system rules are indicating to you.

Persistence, Skill, Hardwork and Faith are all your need to create a successful Trading System!

Good Luck!

The very purpose of using indicators and developing your understanding of technical analysis is to eventually produce your own trading system. The simplest way to achieve a completely objective trading psychology is to produce a trading system and strictly abide to it. Many experienced traders can tell you that by doing this, you are automating your trading process and removing the subjective component which is typically your devils advocate. This allows you to have no discretion when you are trading and removes your fear of failure when making trading decisions.

We hope to show you in this tutorial that while producing a trading system is often

time consuming, difficult and challenging to follow once implemented – it can have some great rewards in the long run. We will also demonstrate some typical issues that technical analysts walk into when developing these systems, and some easy ways to avoid these mistakes.

What is a Trading System?

Although you may have thought we have already covered this point in our opening summary – you are very wrong. A trading system has multiple meanings and typically different technical analysts will have diverse interpretations of how they believe the term should actually be defined. In saying this, from the large amount of literature that the author has examined over a number of years, a multitude of different definitions and meanings have arisen. A constant trend noticed at the heart of all of these definitions is simply that a trading system, in its strictest sense, is a group of specific rules, or parameters, that dictate every trading decision a trader makes in determining entry and exit points for a particularly security.

Furthermore, a trading system should operate like clockwork. All your clogs should slot into place, and every trading decision you set down should move like the hands on the face. This allows for no subjective trading decisions to be made and the overall success of your system is judged on how well you have developed your rules, implemented your entry and exit strategies and the amount of profit you have achieved as a result.

This sounds too tough for me, there is no way I could develop a trading system! Not so – and don’t let the previous paragraphs intimidate you. Almost all trading systems have a basic architecture that can be followed:

• The system covers all trading scenarios so that no matter the direction of price movement, your system can determine the appropriate action by itself and does not require subjective intervention by you.
• Regardless of price direction, have faith in the trading system you have developed and don’t overrule what it is suggesting by means of your judgement.
• Ensure that you have stress tested every indicator and used a multitude of different indicators in your system. Test all these indicators on a variety of different historical data and ensure that your profit /loss ratio is greater than a 1-1 ratio.
• Keep it simple and straightforward – complexity is not correlated to trading success. A common misconception of many traders is that they feel the more complex a trading system is, the higher the chances they have of getting a profitable return. This is simply not case, and often the best trading systems are based on basic principles and straightforward ideas. Remember to and try to keep your trading system as simple as possible, and no doubt your well achieve your desired result.

Success’ and Failures of Trading Systems

There is an immense amount of literature regarding why trading systems are so good, and why you should purchase one trading system over another. You have most likely seen many ads selling trading systems that guarantee a large return, with little risk and “>80% accuracy on Every Trade!”. The majority of these systems are a farce, and when you read into the fine details of the terms and conditions, you will be quietly surprised with the amount of conditions imprinted on the software.

When writing this article, one site promoted “75% – 80% profitable trades with losing trades no larger than the winning trades” and then when the author read more into the fine print it was quoted “No promises of accuracy are made. Anything information used on this site is done so at your own risk. We assume no liability or responsibility for errors or omissions.” This is not to say that all trading systems which have been developed are not successful – there are many that have been – it is simply recommended that there are no guarantees on anything, and although it may suggest it can achieve fantastic returns, it may actually never return your investment. A very sensible question to ask yourself before purchasing a trading system software product is-  “Why would anyone want to sell such a successful trading system if they could keep the profits to themselves?”

Well, what do you recommend? The best way to develop any type of trading system is to study and understand technical analysis yourself, do the hard yards and develop your own system. This ensures that profits you make are from your own hard work, and you cant blame anyone else for your mistakes but yourself.

Some more common Success’ and Failings of Trading Systems are Listed Below:

Success’

Emotionless Trading – Trading psychology is one of the hardest stumbling blocks to overcome in both technical trading and everyday investing. As stated in our Risk Tutorial, investors and traders alike must ensure that they understand their risk profile and determine the exact amount they want to spend. The beauty of developing a trading system is that it must be strictly adhered to and removes the emotion of trading

• Improvement of Technical Skill– Without question this is one of the greatest reasons to create a trading system. Even if you create a trading strategy for practice, then this will be greatly useful in the development of your skill and improvement of your knowledge of Technical Analysis.
• Reduction of Time – The development and application of a trading system can reduce the amount of unnecessary trading and reduce your overall time commitment. This allows the trader to spend more time on reviewing hist

Failures

We’ve looked at the main advantages of working with a trading system, but the approach also has its drawbacks. Some of these include:

• Development – As suggested earlier, the toughest part of developing a trading system is having the strong technical background knowledge to do so. There is no point even attempting to develop a useable trading system if you do not understand the fundamentals of technical analysis, and know how to apply this knowledge profitably to the market. Technical Analysts spend many years developing these skills and they are derived from practice, patience, experience, devotion and more importantly mistakes. If you spend the time doing the required work, you can develop a highly successful system that will see your bank account skyrocket.
• Brokerage Costs – Many traders forget to factor into their systems that brokerage costs will eat into profits. There is no point in developing a trading system that capitalises on the smallest margins, if your net profit is eroded due to brokerage costs. The key is to factor is all costs when creating your model and take heed that it may be impossible to test every single aspect of your system completely. Attempt to align your system as closely as possible to the real thing when you are developing it. Remember that even though your system may work flawlessly in practice – it is not until you have tested it in a real trading situation that you will see its effectiveness.

Under the first outcome, regulation has made it possible for people to trade in a falling market which is often referred to in finance as a “bear market”. This allows an investor the ability to sell a desired quantity of a security, which he/she does not own. The investor will in theory, borrow stock from a holder, (usually a brokerage firm) which they consequently sell. To profit from such a practice, the investor must rely on the falling price of the stock, which, eventually on settlement will allow the investor to buy back the stock at a lower price in order to close the trade. Whilst this method of trading can prove beneficial in a falling market, if the stock were to rise, the investor would be forced to buy the stock back at a higher price and subsequently suffer a loss.

This follows on to the second objective and reason behind the regulation of short selling. Once a person decides to embark upon a short position, he must at some point close out, and buy back the stock to settle. Therefore, when a market is falling and sellers outnumber the amount of buyers for any particular stock an investor holding a short position must then buy back the stock from a seller, which would subsequently increase the buying side of the stock and ultimately add demand to stop the market from further decline.

The third object of short selling is to improve market efficiency and liquidity. When a stock has risen to levels which seem higher than expected (often referred to as overbought) where the bulls in the market have pushed the price to a figure which the market believes is overvalued, investors may short this stock to bring down the price to a level which the market finds more acceptable.

It is through these reasons why short selling is regulated and permitted, and can therefore achieve a positive result within the various markets which adopt it

EXAMPLE

Short selling in Antimony

About 15 brokers who shorted the 20 cent stock of Antimony Nickel in February 1971. Gordon Barton held 18% after the float, and started buying heavily. Soon he owned 105% of the stock, thanks to the short selling. He promptly stuck the price up to $3. Alas, the Sydney Stock Exchange suspended the stock, claiming there was not an orderly market. Sykes claims seven of the 10 firms on the SSE committee were short sellers. This case is an example of a “corner” where the short sellers were squeezed out as the stock was a small company and not very liquid, no-one was selling any of the stock. The self-regulation, in those days protected the brokers – “mates”, and never faced the music.

Short Selling to speculate

The most obvious reason to short is to profit from an overpriced stock or market. Probably the most famous example of this was when George Soros “broke the Bank of England” in 1992. He risked $10 billion that the British pound would fall and he was right. The following night, Soros made $1 billion from the trade. His profit eventually reached almost $2 billion.

Options contracts on ASX

Corporations Regulation 7.9.79(1)(a), where it “does not have effect in relation to a sale of financial products that is done by the giving or writing of an option registered with: (a) an Options Clearing House Proprietary Limited“.

s 1020B(2), which states, “a presently exercisable and unconditional right to vest the products“.Here, the Act is referring to a situation whereby a sequence of short sales would be deemed legal if it is executed under an options contract

Options over futures contracts on SFE

Corporations Regulation 7.9.79(1)(b), where it “does not have effect in relation to a sale of financial products that is done by the giving or writing of an option registered with: (b) a SFE clearing Corporation Pty Ltd”.

s 1020B(2), which states, “a presently exercisable and unconditional right to vest the products”. Here, the Act is referring to a situation whereby a sequence of short sales would be deemed legal if it is executed under an options contract.

Arbitrage

Arbitrage transaction pursuant to s1020B (4)(b) & ASX Market Rule 19.2 which permits arbitrage transactions to occur as long as the Trading “Participant” – s761A which defines this as “a person who is allowed to directly participate in the market under the markets operating rules” – “is a registered arbitrageur” & sells the products on “bona fide (in good faith) arbitrage account on another market”.

Therefore, in the above sequence of short sales the arbitrageur will buy a stock on a foreign exchange which hasn’t adjusted for the exchange rate. The arbitrageur will purchase the undervalued stock and short sell the overvalued stock, thus profiting from the difference.

Offsetting contract to buy – unfulfilled conditions (s 1020B(4)(c))

“before the time of sale has entered into a contract to buy those products and who has the right to have those products vested in the person”

Where payment, receipt by the person of a proper instrument of transfer and the documents of title are present

This situation will arise when a trader already has a contract to buy (ie go long) on a particular stock

The short sale will subsequently counter balance the contract to buy with the contract for the quantity to go short.

Tick test

Restrictions on when a short sale may be executed. Tick-test rules dictate that a short sale can be made only in two situations:

1. When the price of the particular stock is higher than the last trade price (an uptick).

2. In a case where there is no change in the last trade price. The previous trade price must be higher than the trade price that preceded it (a zero uptick or zero plus tick)

This rule is intended to prevent investors from destabilizing the price of a stock when it’s falling. Also known as the short sale rule

Example

THE ENDING PRICE > STARTING PRICE is LEGAL

THE ENDING PRICE < STARTING PRICE is NOT LEGAL

Approved short sale products

Under [s 1020B(4)(e)] the legal notion of short selling is permitted if (i) “the products are included in a class of products in relation to which there is in force a declaration, made by the operator of a licensed market as provided by the operation rules of the market, to the effect that the class is a class of products to which this paragraph applies; and (ii) made as provided by the operating rules of the market; and (iii) at the time of sale, neither the person who sold the products, nor any person on behalf of whom the first-mentioned person sold the products, was an associate, in relation to the sale, of the body corporate that issued the products”.

Short Selling Market Rules

The issue of the “operating rules of the market” in relation to the shares in question would need to be classed under Section 19 of the ASX Market Rules: Short Selling -Traded products

19.3-19.7 highlights the “permitted short selling of approved short sale products and public securities”. However, it is under the rules of 19.7.1 which short selling is most relevant

Here, it states, “ASX may designate a Traded Product to be an Approved Short Sale if (a) 50 million Traded Products of the class have been issued; (b) the market capitalisation of the Traded Products of the class on issue is not less than $100million”.

Thus, if this series of short sales satisfies s 1020B(4)(e) in conjunction with section 19 of the ASX Market Rules, it shall be deemed legal.

If your broker has on-line facilities available, then you will also receive instructions on how to trade shares online, and will most likely be issued with a trading password. It is important to have all this documentation near you when you begin the trading because you will be asked to enter it. This is done to ensure your security is maximized and no one else can access your account.

Once you arrive at the login in screen you will have to enter your relevant Login ID and Password information, issued to you in your initial documentation. If you do not have this information in your starting pack – you will need to contact your broker and request to have an online account established before continuing to the next step.

Once you are logged in you will see a whole arena of facilities that are available at your doorstep for researching and analyzing different shares. Depending on your broker these will usually include*:

• Watch Lists
• Portfolio Monitoring
• SMS Alerts
• Email Alerts
• Market News
• Indicies
• Market Depth
• Company Research
• Charting Tools
• Current Dividends

Each online broker presents its web page in a different format, so to execute a trade you will need to search for the “New Order” section. Depending on the your broker, you will usually get a screen mimicking this fabricated one below:

Follow the steps to transact a trade!

1. Enter the ASX Code of the security you want to purchase.
   • If you are unsure of the ASX Code, there will be a facility on the web site to search for the company you want, using its title.
2. Select whether you wish to Buy newshares, or Sell shares you already own.
3. Enter the Quantity of shares you wish to Buy or Sell
4. Determine whether you wish to Buy/Sell the shares:
   • At Market – This means that you are willing to buy/sell the shares at whatever the market is currently offering. If you don’t believe the share price is going to fluctuate substantially during the next trading day period, or if you want to buy/sell your shares quickly – then this is the option for you!
   • At Limit – This is where you enter the maximum value (per share) you believe you can buy the shares at, or the minimum amount (per share) you think you can sell your shares at. For example, if your shares are currently trading at $9.50 but you believe they are worth $10 – then you can enter $10 dollars At Limit, and they will not be sold until market price reaches your limit.
5. Either enter the amount for At Limit order/sales in the Price box or nothing for At Market Orders/Sales and select Review
6. Another screen will appear summarizing your order and calculating the associated Cost (if you are buying) or Profits (if you are selling) minus brokerage charges and GST.
7. You will now (usually) be asked to enter you trading password which is different to the Password you used to login. This is usually provided with your initial documentation and should be entered if required.

(Otherwise proceed to next steps)

1. Select Confirm Order/Sale, or similar, and your online experience has been completed. The outcome of your purchase or sale will be received in the mail as well as through other options including SMS, Email and WAP if your Online Broker provides these facilities.
2. Now just wait for the settlement of the shares to occur.