What are CFDs? Contract For Differences is a way to basically “bet” on the price movement of a product, you can trade CFDs or stocks, commodities, indices, forex and more. You don’t own or trade the underlying product in any way, you simply trade on the price movement of that product, which is why CFDs are known as derivatives.
Trading CFDs is very risky because CFD brokers usually give leverage to traders, however CFDs allow for easy, liquid and low cost trade of many products that would otherwise be quite difficult to trade on.
CFDs are traded in units, which sometimes correspond to the price of the underlying, but not always.
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