We cover the CFD trading platform
Plus500 Review — FAQs
How do CFDs and stocks differ?
Stocks are, in some sense, contracts that give you some level of ownership in a company. As a shareholder, you have certain ownership rights, such as dividends according to the company’s policy. And the greater your number of shares, the more theoretical ownership you have in the company.
Contracts for differences on the other hand are not a contract between you and the company, they are a contract between you and an unrelated broker. Together, you’re speculating on the future stock valuation of a company. It’s a bit like guessing on the outcome of a football match or horse race.
Is Plus500 ‘Invest’ available in Britain?
No, and you’re also unable to make an account for the Futures account. The only offering by this platform in the UK market is for accounts that handle contracts for differences (CFDs). On the flip side, the American market can access both the Invest and Futures trading accounts, but they are not able to handle contracts for differences.
How can I trade CFDs?
The main way arguably to do any kind of investment is to be informed and to try to develop general prudence, commonsense and understanding. This might sound trite, but in the bigger picture of life, investing in the financial markets is one tiny slice of life in all of its possibilities. Contracts for differences represent an extreme version of that very small slice.
Do contracts for differences get taxed?
Tax is not deducted at source, but it is the client’s responsibility to pay any relevant taxes applicable to their trading. CFDs get charged capital gains, although they are free from stamp duty.
Who invented CFDs?
The contract for difference was developed during the 1970s in Britain. It was used as a way of speculating on gold. The contract for difference became widely used during the 1990s. It was originally created as a form of equity swapping for trading on margin. Most sources credit Brian Keelan and Jon Wood with the invention.
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