Basics
What is CFD (contract for difference)?
By the verify.trading team · Last reviewed · How we write
A CFD is a leveraged contract that pays the difference between the opening and closing price of an asset, without owning the asset.
Key points
- Leveraged, no ownership of the asset.
- Firms must state the share of retail clients who lose money.
- Losses can be fast.
CFD (contract for difference) explained
Because CFDs are leveraged, losses can build quickly. UK and EU regulators require firms to state the percentage of their retail clients who lose money trading CFDs, and that share is typically high.
Related terms
Related tools and guides
General education, not investment advice. Regulatory limits and prop firm rules change; check the official source. verify.trading provides records and analysis, not investment advice; trading involves significant risk of loss. Absence of a regulatory action is not an endorsement, and absence from a regulator's list is not proof of authorisation.