Trading FAQs

Why do CFD traders go short?

“To short” is a trader’s or investor’s term to short sell a financial product. “To short” is the opposite of going long. Going long is the term used for when a trader or investor buys low and aims to sell higher. Going long is very common and is the standard strategy of investors. “To short”,…

Where did CFDs come from, and why the weird name?

Contracts for Difference or CFDs were originally developed in the United Kingdom in the early 1990’s by Smith New Court, a London based trading firm. CFDs were mainly used by the firm’s hedge fund clients to short sell using the benefits of leverage and also to take advantage of the stamp duty exemptions, which were…

What does the term scalping mean, and how can a scalper make money on CFDs?

Scalping is a trading technique that involves opening and closing positions intraday in a variety of instruments such as FX, Futures or CFDs; typically “scalpers” will aim to profit from small price movements in their trading positions. They will also tend to trade much more frequently than medium to longer term “trend” following traders. It…

How CFDs are taxed

If you’ve been unnerved at the market fall, and you dread conversations with your CFD provider, here’s a surefire way to turn the tables: ask your provider about the tax treatment of CFDs Your provider will instantly utter the weasel word “compliance”, firmly state that it couldn’t possibly be seen to be giving individual tax…