The CFD is a tradable contract between a client and their broker. They're exchanging the difference in the initial price of the trade and its value when the trade is unwound or reversed.
What is a CFD? The term “Contract for Difference” (CFD) refers to an agreement between a trader and their broker. The “ contract ” sets out that one of the two parties will pay the other, depending on which direction the price of an asset moves.
A CFD – short for ‘contract for difference’ – is the type of derivative that enables you to trade the price movements of these financial markets with us. With this form of trading, you don’t own the underlying asset – you’re only getting exposure to its price movements.