What is a contract for difference (CFD)?

A contract for difference (CFD) is a popular investment product for investors who want leveraged exposure to commodities, currencies, indices or even stocks. It allows investors to gain exposure to an investment theme without having to own the underlying asset.

Key Takeaways:

• A contract for difference is a financial agreement between a buyer and a broker that allows the buyer to bet on whether a contract price will rise or fall without owning the underlying asset.

• CFDs for investment products, including stocks, indices, commodities and currencies, are available in many countries. However, they are banned in the US.

• Bybit users can now trade CFDs on Bybit TradFi for assets like gold, commodities, indices and stocks.

What is a contract for difference?