A Contract For Difference (CFD) is a type of financial instruments. It is a derivative contract in which the organization that issues the contract agrees to pay the buyer the difference between the current value of an underlying (it can be a bond, an index, an equity,etc…) and its value at the time the contract was made. CFDs have gained popularity in recent years as they enable investors to speculate on the price movements of an underlying without having to buy the underlying. CFD are complex instruments and involve risks.
CFD are complex instruments and many inexperienced investors experience financial losses. That’s why CFD providers have to report on their website important statistics: the percentage of retail investors that lose money when trading CFDs with them. And usually, this percentage is above 60%.