CFD
Updated 2026-09-20
Definition
Contract for difference: an agreement with the broker to exchange the price difference between opening and closing, without owning the underlying asset.
Why it matters
It allows trading both up and down and with leverage, but amplifies losses and exposes you to broker risk. Retail brokers in Europe must disclose the percentage of losing accounts.
Practical example
A gold CFD doesn't make you own gold: you win or lose the price change times the position size.
Learn more
Course lesson: How the forex market really worksRelated entries
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Educational content, not financial advice. Trading involves risk.