Glossary
CFD (Contract for Difference)
Trading
A CFD is a derivative contract that pays the difference between an instrument's opening and closing price without transferring ownership of the asset.
CFDs allow long and short exposure with leverage across forex, indices, commodities, shares and crypto from a single margin account. Costs are the spread, any commission, and an overnight financing charge on positions held past rollover.
Because they are leveraged and financed daily, CFDs suit short- to medium-term trading rather than long-term holding. They are banned for retail clients in the United States and heavily restricted elsewhere.