For starters, the term ‘CFD’ is an abbreviation for Contract For Difference. Contracts for difference (CFDs) enable traders to speculate on the price movements of underlying financial assets (instruments) such as shares, indices, commodities, currencies, and treasuries. Now, many of you may be wondering – do traders really need to purchase the real commodities like Gold or Brent Crude Oil if you ‘buy’ them using CFDs? Nope! There is no delivery of physical goods or securities with CFDs. In fact, a CFD investor never actually owns the underlying asset but instead profit based on the price change of that underlying asset or security through a financial contract. The value of a CFD contract does not consider the asset’s underlying value: only the price change between the trade entry and exit. 3 Key Things to know about CFDs Before we delve into the pros and cons of trading CFDs, there are 3 key things to know about them....