What is scalping?
Scalping is a very fast-paced style of trading. If you're scalping then you're buying and selling shares (or other asset classes), often hundreds of times per day. Each position is held for a matter of seconds or minutes, in search of small gains many times over. All positions are closed at the end of the trading day.
Where have you heard about scalping?
Scalping can have an impact on pricing movements throughout the day, so investors might hear it talked about by commentators. But they are less likely to come across it in everyday investment discourse.
What you need to know about scalping...
It's a high-risk style of trading. Positions are only held for very short periods of time, but they're often large. Scalpers (traders who use scalping) use leverage to be able to take such large positions. They're looking for gains at the level of pennies per share that are greatly magnified by the size of these positions.
In order to practise scalping, someone would need access to real-time 'indicators' analysis tools that help assess which positions to take, and they would also have to be able to trade at very fast speeds. This is a very specialist area. Scalpers usually negotiate favourable commission terms too, because potential gains are so small. Losses can be substantial though, particularly if scalpers don't exit a position fast enough. It has a reputation for being intense and frenetic!