Contract for Difference (CFD)

    A “contract for difference” (CFD) is a type of derivatives trading agreement in which the difference between the open and closing prices of an asset is settled in cash with no compensation in the form of physical goods or other monetary value. A CFD allows traders to bet against the expected direction of an asset’s price by employing advanced trading techniques in a very short period of time, often with extremely high leverage. Investors typically use CFDs to trade forex (fx), cryptocurrency, commodities, and other markets.