Contract for Difference

A Contract for Difference (CFD) is a contract between trader and broker to exchange the difference in price of an asset between open and close. CFDs let retail traders gain exposure to forex, indices, commodities, stocks, and crypto with leverage, without owning the underlying. CFDs are leveraged products with overnight financing (swap). They are popular outside the US (where they are banned for retail clients) and form the basis of most retail forex brokers' product range.