What is CFD trading? Definition and explanation of the term | bestbrokers.co.uk

Image: CFD Trading

CFD stands for Contract For Difference. It is a financial contract between two parties, one being the « buyer » and the other the « seller ». The seller pledges to pay the buyer the difference between the price of an underlying asset upon subscription of the contract and its price at a future date. If the difference is negative it is the seller who will collect the difference from the buyer.

This is a companion discussion topic for the original entry at https://www.bestbrokers.co.uk/definition/cfd.html