Contract for difference

A Contract for Difference (CFD) is a type of financial agreement that you can make with someone else in order to make money. For example, if you think the price of something, like a stock, is going to go up, you could make a CFD with someone else and agree that when the stock goes up, you can both make money. So, if you think the stock is worth $10 now and you make a CFD with someone else, you could agree that if the stock goes above $15, then both you and the other person will make money. On the other hand, if the stock doesn't go up, then neither of you will make any money.