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CFD FAQs

If you can't find an answer to your question, please do not hesitate to contact us, and we will be happy to answer any questions.

About Galvan

Is Galvan regulated?

Yes. Galvan Research and Trading Ltd is authorised and regulated by the Financial Conduct Authority. Our Firm Reference number is 401179.

Where did the name Galvan come from?

The name Galvan is a derivative of the word galvanise, which means to stimulate or excite. Galvanised steel has a protective layer of zinc, allowing it to remain strong for decades.

About CFDs

What is a CFD?

A CFD offers you all the benefits of trading shares without having to physically own them. Simply put, it is a contract that mirrors the performance of an underlying instrument.

It is traded on margin, and just like physical shares your profit or loss is determined by the difference between the price you buy at and the price you sell at.

What is trading on 'margin'?

Margin trading allows you to free up your capital by placing only a small percentage of the value of trade in your account.

The initial amount you pay is known as the deposit or Margin Requirement.

Dealing on margin can significantly increase your profits, but it can also significantly increase your losses in the same way.

Margin rates vary depending on what you trade, but typically range between 1% and 10%. You can find details of the margin requirements for each specific instrument on the trading platform.

What charges are involved in trading CFDs?

You pay a commission when you trade and may incur financing charges on positions held overnight.

There are no hidden costs such as administration or management fees and you deal at the market price as we do not widen the spread of the share.

What are your commission rates?

Our commission rate on equities varies from 0.2% to 0.5% depending on account size. For commission rates and charges related to other instruments please contact Galvan for further information.

Galvan is committed to offering a competitive commission rate which includes our Advisory Service and full access to our Research Centre.  

When is financing charged, and how is it calculated?

Positions held overnight may incur a financing charge.  This may be paid or received dependant upon the position.

Clients pay interest on the contract value of a long CFD. Interest is charged at a percentage over LIBOR (LIBOR is the London Interbank Offered Rate and is linked to base interest rates).

Clients holding short CFD contracts may receive interest on the cash that the sale of the underlying stock would have generated. This is similarly paid at an agreed rate under LIBOR.

For example, if a client was paying a long CFD funding charge of 3% over LIBOR and if LIBOR was 0.5%, the client would be paying a funding rate of 3.5% per annum. If the total contract value was 10,000 the funding charge would be around 0.95 for every day the contract was maintained (350 divided by 365).

This amount would be debited daily from your CFD account. The funding charge is only incurred if the position is held overnight. These amounts will be credited or debited on the next trading day. 

How long can I hold a CFD?

There are no expiry dates on CFDs, as a result you can run a position, long or short, for as long as required.

How can I profit using CFDs in a falling market?

A client can "go short", meaning that they can sell a CFD as an opening position.

A common question is "How can a trader sell something they don't own?" This can be done as what the client is buying is a contract between themselves and the CFD provider, based upon the price movement of a share. It does not matter who agrees to buy and who agrees to sell, as neither party physically owns the share anyway.

The important thing is how far the price of the Share or Index moves, and whether or not it moves the way you want it to. Using this facility, a trader may be able to profit from a falling market.

Will I receive dividends?

Yes. Although a CFD trader does not physically own the share, s/he can partake in Corporate Actions and receive dividends. However, as the CFD trader does not own the share itself, they are not entitled to any voting rights.

What are the tax implications of trading CFDs?

Whilst they are exempt from stamp duty, any profits on CFDs may be subject to CGT (Capital Gains Tax) but losses may also be offset against CGT.

Can I trade other products from the same account?

Yes, Galvan clients can also trade Commodities, Treasuries and Foreign Exchange from their CFD account.

Can I trade over the telephone?

Yes, trading can be conducted over the telephone or the online trading platform. There is no additional cost for trading over the telephone.

Why are some trades denominated in different currencies?

Trades placed on US, European or Asian markets are denominated in the local currency used by the exchange.

Opening an Account

How do I open an account with Galvan?

Applying for an account is quick and easy. The next step is complete our secure online Suitability Questionnaire, or you can download a hard copy.

How long does it take to open an account with Galvan?

Provided you are suitable for CFD trading and we receive the correct documentation from you, your account should be up and running within a business day.

Can I open a joint account?

Yes, to open a joint account you will need to complete a paper based application form signed by both parties. The documentation required from each applicant is the same as that required for an individual account. To download a joint account application form please click here.

How can I contact you?

You can contact us by telephone, email or post. If you can't find an answer to your question, please do not hesitate to contact us, and we will be happy to answer any questions.

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Copyright 2016 © Galvan Research and Trading is a trading name of Trade Facts Ltd (FCA number 401179)

Trading in Contracts for Difference may not be suitable for all investors due to the high risk nature of the product. You may lose all or more of your initial deposit through the use of leverage and may be required to make additional payments by way of margin on a frequent and sometimes daily basis. Failure to do so can result in the closure of part or all of your position. Please refer to Galvan’s risk warning.