A CFD (contract for difference) is an agreement to exchange the price difference of an asset between opening and closing a trade, without owning the asset itself. Most retail forex is traded as CFDs, which allow leverage and the ability to profit from both rising and falling prices.
Forex Term
CFD
A contract to trade price moves without owning the asset.
Example
Trading a EUR/USD CFD lets you profit from the price move without buying actual euros.
Related Terms
Recommended Brokers
IC Markets
Best ECN Execution
Visit IC Markets
Trading Forex and CFDs involves a significant risk of loss.
Risk
Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.