A CFD (contract for difference) is a popular financial derivative product that allows investors to trade the price changes of different financial assets. A CFD contract is basically an agreement to pay the difference between the opening and closing prices of an underlying asset. As an investor, you will earn profits if your prediction on the price direction movement is right (the broker will pay you the difference); and you will incur losses if your prediction on the price direction movement is wrong (you will pay the broker the difference).

 CFD trading is, in essence, speculating on the price changes of an underlying asset. If you believe the prices of an asset will rise, you will buy the asset or simply go long; if you believe the prices of the underlying asset will fall, you will sell the asset or simply go short. The profits or losses you incur will depend on the difference between the opening and closing prices, as well as the size of the trade position.