Contract For Differences - CFD

Contract For Differences - CFD

An arrangement made in a futures contract whereby differences in settlement are made through cash payments, rather than the delivery of physical goods or securities.

Notes:

This is generally an easier method of settlement because losses and gains are paid in cash. CFDs provide investors with the all the benefits and risks of owning a security without actually owning it.

See also: Futures Contract, Non Deliverable Swap, Settlement Date