What is a CFD ?

CFD's also know as contract for difference is a contract between a broker and a trader, regarding the price of an underlying instrument.
It is traded in the form of opening a position in the direction of a certain instrument price and decides on the amount of shares. If the position goes in the favor of the trader, then the broker will pay the difference between the opening price and the closing price, multiplied by the amount of shares in the contract. If the position goes against the trader then will result in paying the difference to the broker.
Such contracts are non delivery contracts.

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