CFD Stands for Contract For Difference. And it’s a contract to exchange the difference in value of the financial deed between the time at which the contract is opened and the time it is closed.
Simply, CFD’s are contractual agreement between two parties to exchange the differences of the prices of the contracts between opening and closing.
How you work on CFD’s?
You actually trade in the currency of the underlying market |e.g. US Dollar for US equities| then your profit of loss is converted into the base currency of your account when your position is closed.