A Brief History of CFD Trading

Oct 12, 2011, 07:58 ET from City Index

LONDON, October 12, 2011 /PRNewswire/ --

In a short space of time CFD trading has grown from a simple idea into a valuable way of speculating on financial markets employed by traders online and on smartphones across the world. CFD trading provider City Index (http://www.cityindex.co.uk/) examines the rise of CFD trading:

CFD trading was originally developed on the derivative desk of a trading firm named Smith New Court as a simpler way for hedge funds to short sell in the London Stock Exchange. It soon became available to individuals, part of the attraction being that CFD trading allowed a trader to benefit from leverage and avoid stamp duty on any profits - neither of which were options afforded by standard share dealing. However, the leverage also meant that traders could lose more than their initial deposit.

CFD trading also allowed - and continues to allow - traders to speculate on markets without owning the underlying shares. This meant CFD traders were able to sidestep the time-consuming and expensive exercise of borrowing stock to trade on a declining market.

Since the 1990s, CFD trading has become increasingly accessible. During the dot com boom, online trading platforms came to the fore: by the turn of the century CFDs were widely available in the UK. Most recently City Index enhanced the industry further with the launch of its multi award-winning mobile CFD trading platform - City Trading™.

CFD trading is now available on a wide range of markets including indices, commodities and currencies. To open a CFD trading account with City Index, visit:

http://www.cityindex.co.uk/cfd-trading/start-trading-cfds.aspx

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, spread betting.

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. For more information, visit http://www.cityindex.co.uk/

SOURCE City Index