This term there are other uses, see CFD (disambiguation).
Contract for Difference (English Contract For Difference, CFD) - an agreement between two parties to transfer each other the difference between the current value of the asset and its value at the end of the contract. Often the term of the contract is not established and the contract may be terminated at the request of only one hand, which granted such a right.
In fact CFD is a derivative financial instrument that allows you to earn income as increase and decrease in the price of the underlying commodity or security. Most often, CFD is used for speculation.
For example, with respect to the shares, CFD is a derivative of the stock purchase agreement that allows you to speculate on the movement of stock prices, without the need for registration of property rights to these shares.
CFD was created in order to meet the demands of speculators with small capital. CFDs allow you to greatly expand the scope of individuals.
CFD market has formed in the early 90s in England and was originally intended operations on contracts for the purchase and sale of shares, but not ownership of these shares. At this point CFDs also formed to buy and sell commodity futures contracts and financial instruments.
Usually, CFD trading is an additional provision of credit (margin trading).
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