What is BKT Smart Invest?
BKT Smart Invest is an online platform (available on pc and mobile) allowing BKT’s clients to make investments globally without boundaries. Customers can choose among different financial product alternatives and they can use the leverage depending on the financial instrument.
- Investment to stocks in different countries like Apple, Alphabet (Google), Volkswagen, Alibaba, Shell, Pfizer Biontech etc. is possible. Even derivatives (CfDs-Contract for Differences) for the stocks can be traded. This allows professional investors to take larger position than initial capital investment amount.
- Investment tools on stock indices from Nasdaq to Hong Kong 50 is available
- Any kind of commodities starting from energy including Brent and WTI Crude oil, precious metals including gold, silver, platinum etc. agricultural commodities including wheat, corn, coffee, sugar, cotton etc. metals including copper, hot-rolled coil steel, etc. can be traded. Even, contracts on carbon emissions quotas are available. Commodities trades may help our clients to protect themselves against risk caused by extreme price fluctuations.
- Mutual funds from different countries and different compositions can be bought and sold through the BKT Smart Invest Platform.
- ETFs (Exchange Traded Funds), which are somehow basket of many securities can be traded in stock exchanges.
- Forex, which is foreign exchange- leverage based trading options for 24 hours.
FOR MORE INFO ABOUT SMART INVEST
- HOW TO BECOME SMART INVEST CUSTOMER
- REGISTER TO SMART INVEST DEMO
- FAQS
- SMART INVEST PLATFORM CLIENT MANUAL
- EDUCATION MATERIALS FX STOCK CFD
- SMART INVEST CONTRACT
WHAT INVESTMENT CAN I MAKE VIA SMART INVEST?
Foreign Exchange (FOREX) refers to the foreign exchange market, in which the foreign currencies of the world are traded. It is considered the largest and most liquid market in the world. As an investor, you can buy/sell one foreign currency against another and make profit out of your (long/short) position.
There are two types of doing Forex transaction:
- Spot Forex: You can do a Forex transaction with your available balance in your account (classical method that you exchange your currency between your accounts or even with cash in Exchange Offices).
- Leverage Forex: Leverage is the ability to use something small to control something big. Specific to forex trading, it means you can have a small amount of capital in your account controlling a larger amount in the market.
You can do a Forex transaction under “Smart Invest” platform and benefit from the leverage. The apparent advantage of using leverage is that you can make a considerable amount of money with only a limited amount of capital. The problem is that you can also lose a considerable amount of money trading with leverage. It all depends on how wisely you use it and how conservative you are.
I.E: The EUR/USD rate represents the number of US Dollars one Euro can purchase. If you believe that the Euro will increase in value against the US Dollar, you will buy Euros with US Dollars having a long position in EUR, short In US$. If the exchange rate rises, you will sell the Euros back, making a profit. Please keep in mind that forex trading involves a high risk of loss. If you use ten to one leverage, it means that for every EUR1 you have in your account you can place a trade worth EUR10. As an example, if you deposited EUR5,000, you would be able to trade amounts up to EUR50,000 on the market using 10:1 leverage. It's not that you should be trading the full EUR50,000, but you would have the ability to trade up to that amount.
Here are a few major benefits of trading Forex:
- You pay only the bid/ask spreads and very low commission.
- There's 24-hour trading – you dictate when to trade and how to trade.
- You can trade on leverage, but this can magnify potential gains and losses.
- You can focus on picking from a few currencies rather than thousand stocks or derivative instruments.
- Due to leverage, Forex is accessible – you don’t need a lot of money to get started (Minimum account balance should be EUR 3,000.-)
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone.
Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite.
Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose.
For more details, please visit “Smart Invest” platform.
Companies which have listed shares open to public (as opposed to privately owned companies, in which shares are not listed in any stock-exchange market) can be traded by investors, giving the right to investors to have a slice of the company shares. When you buy stock, you become a shareholder, which means you now own a "part" of the company. If the company's profits go up, you “share” in those profits and benefit from it. If the company’s profits fall, so does the price of your stock. As a share-holder, you can also benefit from the dividend paid to shareholders.
Shares on an exchange can be bought or sold by anyone with an account in “Smart Invest”. Shares are bought and sold in order to make a profit - buy for $10 and sell for $20 and you've doubled your money. In the short-term, share prices move rather randomly mostly based on short term expectations, but over the long-term, the prices tend to reflect the success of the company.
Opening an account in “Smart Invest” you can trade approximately XXXX number of different stocks in XX different major stock-exchange markets.
Through “Smart Invest” account, you can invest in to shares of General Electric, Apple, Nokia, Deutsche Bank, Daimler (Mercedes), Coca Cola etc. or do some speculative trades to benefit from short term price fluctuations. Via “Smart Invest” account, you can view a real-time data feed of trade orders on an exchange, so you have visibility of share volumes, prices, direction and the date/time for each trade.
You can do a stock transaction under “Smart Invest” platform and benefit from the leverage by using CFDs (Contract for Differences). The apparent advantage of using CFDs is that you can make a considerable amount of money with only a limited amount of capital. The problem is that you can also lose a considerable amount of money trading with leverage. It all depends on how wisely you use it and how conservative you are.
The contract for difference (CFD) offers traders and investors an opportunity to profit from price movement without owning the underlying asset. It's a relatively simple security calculated by the asset's movement between trade entry and exit, computing only the price change without consideration of the asset’s underlying value. This is accomplished through a contract between client and broker, and does not utilize any stock.
I.E: If a stock has a selling price of EUR15.00 and the trader buys 100 shares, the cost of the transaction is EUR1,500 plus commission and fees. This trade requires at least EUR1,500 in free cash at a traditional broker, while a CFD broker often requires just 10% margin, or EUR150.00.- A CFD trade will show a loss equal to the size of the spread at the time of the transaction so, if the spread is 5 cents, the stock needs to gain 5 cents for the position to hit the breakeven price. You'll see a 5-cent gain if you owned the stock outright but would have paid a commission and incurred a larger capital outlay.
If the stock rallies to a bid price of EUR16.50 in a traditional broker account, it can be sold for a EUR150 gain or EUR150/$1500=10.0% profit. However, when the national exchange reaches this price, the CFD bid price may only be EUR16.50.- The CFD profit will be lower because the trader must exit at the bid price and the spread is larger than on the regular market. In this example, the CFD trader earns an estimated EUR150 or EUR150/$150.00=100% return on investment.
Trading stocks via CFDs carries a high level of risk, and may not be suitable for everyone. Before deciding to trade stocks via CFDs you should carefully consider your investment objectives, level of experience, and risk appetite.
Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose.
For more details, please visit “Smart Invest” platform.
Commodities, whether they are related to food, energy or metals, are an important part of everyday life. Anyone who drives a car can become significantly impacted by rising crude oil prices. The impact of a drought on the soybean supply may influence the composition of your next meal. Similarly, commodities can be an important way to diversify a portfolio beyond traditional securities – either for the long term, or as a place to park cash during unusually volatile or bearish (falling) stock markets, as commodities traditionally move in opposition to stocks.
Basic economic principles of supply and demand typically drive the commodities markets: lower supply drives up demand, which equals higher prices, and vice versa. Major disruptions in supply, such as a widespread health scare among cattle, might lead to a spike in the generally stable and predictable demand for livestock. On the demand side, global economic development and technological advances often have a less dramatic, but important effect on prices. The emergence of China and India as significant manufacturing players has contributed to the declining availability of industrial metals, such as steel, for the rest of the world.
Tradable commodities in “Smart Invest” fall into the following categories:
- Metals (such as gold, silver, and copper)
- Energy (such as crude oil and heating oil)
- Agricultural (such as sugar, corn, soybeans and coffee)
A popular way to invest in commodities is through a futures contract.
A futures contract, which is an agreement to buy or sell a specific quantity of an asset or commodity at a set price at a later time. Futures are available on every category of assets and commodities.
Each future contract requires a different minimum deposit and the value of your account will increase or decrease with the value of the contract. If the value of the contract decreases, you will be subject to a margin call and will be required to place more money into your “Smart Invest” account to keep the position open or your account can be closed automatically due to loss. Due to high leverage, small price movements can mean large returns or losses, and a futures account can be wiped out or doubled in a matter of minutes.
Trading Futures contracts carries a high level of risk, and may not be suitable for everyone.
Before deciding to trade futures contracts, you should carefully consider your investment objectives, level of experience, and risk appetite.
Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose.
For more details, please visit “Smart Invest” platform.
Leverage transactions in forex, stocks and commodities are done through a margin account buying on margin. Buying on margin is borrowing money through “Smart Invest”” account to purchase more assets (Forex, Commodities, Stocks) than your actual money allows. You can think of it as a loan taken through your account. Margin trading allows you to buy more assets than you'd be able to normally.
You can keep your loan as long as you want, provided you fulfill your obligations. First, when you sell assets (Forex, stocks or commodities) in a margin account, the proceeds first go for the repayment of the margin loan until it is fully paid. Second, there is also a restriction called the maintenance margin, which is the minimum account balance you must maintain before you will be forced to deposit more funds or close your position to pay down your loan. When this happens, it's known as a margin call.
Borrowing money isn't without its costs. Regrettably, marginable assets in the account are collateral. You'll also have to pay the interest on your loan. The interest charges are applied to your account unless you decide to make payments. Over time, your debt level increases as interest charges accrue against you. As debt increases, the interest charges increase, and so on. Therefore, buying on margin is mainly used for short-term investments. The longer you hold an investment, the greater the return that is needed to break even. In stocks trading, we want to remind you that not all stocks qualify to be bought on margin. In U.S. regulatory authority Federal Reserve Board regulates which stocks are marginable.
An investor buys EUR10,000 of a company’s stock by using EUR5,000 of his own funds and borrowing the remaining EUR5,000 from the “Smart Invest” account. Let’s suppose that “Smart Invest” account requires a maintenance margin of 25%. At the time of purchase, the investor's initial margin ratio as a percentage is 50%.
Investor initial margin as percentage = (Market Value of Stocks - Borrowed Funds) / Market Value of Stocks
In our example: 50% = (EUR10,000 - EUR5,000) / (EUR10,000)
This is above the 25% maintenance margin, but suppose on the third trading day, the value of the purchased stocks falls from EUR10,000 to EUR6,000. This results the investor’s actual margin ratio to fall 16.67% and investor’s money to fall EUR1,000.- from EUR5,000.-
16.67% = (EUR6,000 - EUR5,000) / (EUR6,000)
Now, Investor’s money fall to EUR1,000
EUR 5,000 (Initial invested amount) - EUR 4,000 (loss on stocks) = EUR 1,000
Such a fall in stock price causes investor’s margin ratio to be below the maintenance margin of 25%. “Smart Invest” account makes a margin call, requiring the investor to deposit at least EUR500 to meet the maintenance margin. The amount required to meet the maintenance margin is calculated as:
Amount to Meet Minimum Maintenance Margin = (Market Value of Securities x Maintenance Margin) - Investor's remaining money.
In our example, the required EUR500 is calculated as:
EUR500 = (EUR6,000 x 25%) - EUR1,000
The investor needs at least EUR1,500 in total (the market value of securities of EUR6,000 times the 25% maintenance margin) in his account to be eligible for margin, but only has EUR1,000 as remaining investor’s money, resulting in a EUR500 deficiency. The margin call is for EUR500, and if the investor does not deposit the money in a timely manner, the “Smart Invest” account can automatically sell and liquidate securities for the value sufficient to bring the account into compliance with the maintenance margin rules.
As per the above example trading with leverage through margin carries a high level of risk, and may not be suitable for everyone.
Before deciding to trade with leverage, you should carefully consider your investment objectives, level of experience, and risk appetite.
Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose.
For more details, please visit “Smart Invest” platform.
A Fund is a pool of money that is allocated for a specific investment purpose.
Investment Funds are investment products created with the sole purpose of gathering investors' capital, and investing that capital collectively through a portfolio of financial instruments such as stocks, bonds and other securities.
An Investment Fund is a supply of capital belonging to numerous investors used to collectively purchase securities while each investor retains ownership and control of his own shares. An Investment Fund provides a broader selection of investment opportunities, greater management expertise, and lower investment fees than investors might be able to obtain on their own.
With Investment Funds, individual investors do not make decisions about how a fund's assets should be invested. They simply choose a fund based on its goals, risk, fees and other factors. A fund manager oversees the fund and decides which securities it should hold, in what quantities and when the securities should be bought and sold.
Key difference between an Investment Fund and ETF is the way they are traded and managed. ETFs can be traded like stocks, while mutual funds can only be purchased at the end of each trading day based on a calculated price. ETFs, on the other hand, usually are passively managed and based more simply on a particular market index.
You can invest in many different Investment Funds through the “Smart Invest” platform like: Aberdeen, BlackRock, JpMorgan, Pimco, etc.
An Exchange Traded Fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. ETFs can even be structured to track specific investment strategies.
Key difference between an Investment Fund and an ETF is the way they are traded and managed. ETFs can be traded like stocks, while mutual funds can only be purchased at the end of each trading day based on a calculated price. ... ETFs, on the other hand, usually are passively managed and based more simply on a particular market index.
- An exchange traded fund (ETF) is a basket of securities that trade on an exchange just like a stock does.
- ETF share prices fluctuate all day as the ETF is bought and sold.
- ETFs can contain all types of investments including stocks, commodities, or bonds.
- ETFs offer low expense ratios and fewer broker commissions than buying the stocks individually does.
You can invest in many different ETFs through the “Smart Invest” platform like: Aberdeen, Ishares, Vanguard, etc.
WARNING!!!
CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. 76% of our retail investor accounts lose money when trading CFDs with us. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.