contract for difference [CFD]

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In finance, a contract for difference (CFD) is a contract between two parties, typically described as «buyer» and «seller», stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time (if the difference is negative, then the buyer pays instead to the seller). In effect CFDs are financial derivatives that allow traders to take advantage of prices moving up (long positions) or prices moving down (short positions) on underlying financial instruments and are often used to speculate on those markets.
CFDs are traded between individual traders and CFD providers. There are no standard contract terms for CFDs, and each CFD provider can specify their own, but they tend to have a number of things in common.
The CFD is started by making an opening trade on a particular instrument with the CFD provider. This creates a ‘position’ in that instrument. There is no expiry date. Once the position is closed, the difference between the opening trade and the closing trade is paid as profit or loss.
(read more: https://en.wikipedia.org/wiki/Contract_for_difference)

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