A Contract for Difference (CFD) is a popular form of derivative trading that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. At the end of a CFD, the parties exchange the difference between the opening and closing prices of a specified financial instrument, which can include foreign exchange, shares and commodities. A CFD is an advanced trading strategy that is used by experienced traders, and gives traders an opportunity to leverage their trading by only having to put up a small margin deposit to hold a trading position, as well as substantial flexibility and opportunity.
Related Definitions in the Project: The Commercial Definitions; Project Contract
