bhp facing 920 mil 1st half loss on iron ore, page-41

Hi Mort

Have a look at the ASX website.

Look at the sections on OPTIONS, WARRANTS ANDS CFD'S and FUTURES if you're brave.

http://www.asx.com.au/index.htm

They do a great job on detailing each one with on-line courses as well.

This ought to keep you busy for the rest of the week.

Short answer to your question - short a stock if you think it's going down, go long if you think it's going up.

Here's the danger in derivatives that I know of. Never touched CFD's but the story is much the same.

TODAY - If you buy a call (going long) or a put (going short) in BHP and THE STOCK falls $10 in the next 2 weeks, here's a couple of scenarios, worst and best case in each.
(only guesstimates)

Option call - becomes worthless
Warrant Call - becomes worthless
Futures contract - you loose your house.

Option PUT - you could make 10 times investment.
Option Warrant - you could make 5 times your investment
Futures contract - you can buy a new house.