Contract For Difference

Synonyms: CFD

A Contract For Difference (“CFD”) is a type of derivative where, rather than agreeing to exchange any physical goods or securities, there is an agreement to give or receive the difference in the value of the trade price between the opening and closing of the CFD.

CFDs allow investors to speculate on the direction of securities in the short term. They are cash-settled, however generally provide for ample margin trading.

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