CFD which is short for Contract for Difference, are arrangements made in financial derivatives trading. This allows traders to speculate on price movements of various instruments such as Forex, Stocks, Commodities, Indices, Bonds, and Cryptocurrencies. When it comes to CFDs, you buy or sell a number of units of the particular instrument instead of the underlying asset or instrument. You make a profit for every point that moves in your favor and vice versa. Since CFD is a leveraged product, you can magnify your profits which means your losses would also, in turn, be multiplied based on the full value of the position.