What is CFD?
CFD or Contract For Difference – a contract for the difference in prices of various underlying assets. Most often they are assets traded in financial markets.
When concluding such a contract, one party undertakes to transfer to the other party the difference between the current value of the asset and its value at the end of the contract. At the same time, the contract does not imply the transfer of ownership of the underlying asset itself.
Typically, the CFD does not specify the validity period, and the contract can terminate at the request of one of the parties to which such a right is granted.
CFD-contracts appeared in the 1980s. in England. Then they were just for the difference in the share price. Today such contracts are concluded on almost all exchange instruments.
Before the appearance of the CFD, only participants with large capital could trade on instruments of international trade exchanges (for example, stock and commodity exchanges), since the cost of entering the deal on exchanges amounts to hundreds of thousands of dollars. CFD opened access to trading on exchange instruments to a wide range of individuals with very different levels of capital.
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