A Contract for Difference (CFD) is an investment instrument developed to allow market traders the benefits of possessing Shares, Indices, Forex, and Commodity positions without actually owning the underlying instrument itself. The market trader enters into a contract with a CFD at a specific price, and the difference between that price and the price that it is closed at is settled in cash.

It is important to remember that by trading CFDs it is possible to lose all or part of an investment.

Leverage

CFDs are traded on leverage, meaning you pay only a small fraction of the total trade value to open your position rather than paying for it in full, this is known as margin.

Example:

You decide that you want to buy Google Shares. Instead of purchasing 1,000 Shares of Google from a Stockbroker, you buy 1,000 CFDs of Google on a trading platform. If there is a $4 per share fall in the price of Google, you would receive a $4,000 loss. However, if there is a $4 per share rise in the price of Google, you would receive a $4,000 profit, just as if you had purchased the actual shares.

Below you can find the most popular trading assets. Most brokers offer these assets through their CFD service.

Shares List: