FAQ General Trading Questions

What is a CFD?

A CFD, or contract for difference, is an agreement that allows you to speculate on the value of a financial instrument without having to purchase it outright and take possession of it. In a CFD contract, if the value of the instrument in question is higher when the agreement is closed than it was when it was purchased, the seller must pay the difference to the buyer, if the value is lower the buyer must pay the difference to the seller.