What is a CFD (contract for difference)?

A CFD (contract for difference) is an agreement between a buyer and a seller that the buyer must pay the difference between the current value of an asset and its value at contract time. A CFD trader will never truly own the underlying asset but profit from its price movement.

What are CFDs & how do they work?

So, what are CFDs? A Contract for Difference (CFD) represents an agreement between two parties to exchange the difference in an asset’s price from the time at which the contract is opened, to when it is closed. To better understand how to trade CFDs, a good place to start is by looking at traditional investing.

What does CFD mean?

The meaning of CFD is 'contract for difference', which is a contract between an investor and an investment bank or spread betting firm, usually in the short-term.

Can CFDs deliver physical goods or securities?

There is no delivery of physical goods or securities with CFDs. Contracts for differences is an advanced trading strategy used by experienced traders and is not allowed in the United States. A contract for differences (CFD) is a financial contract that pays the differences in the settlement price between the open and closing trades.