At Trader’s Way, Prime Online Forex and CFD broker, we understand that some of our clients are new to trading and naturally, we encourage them to review our edu resources on trading in order to understand how the market works. As part of our series on forex education, here’s a brief recap on CFD. A CFD, or a Contract For Difference, is an agreement between two parties to exchange the difference between the opening and the closing prices of a contract at the moment of the contract closure, with this difference multiplied by the number of units of the asset specified in the contract. A CFD is a derivative linked to the underlying asset price. It does not involve physical asset delivery. A trader is not required to purchase or sell assets physically; for example, if a trader goes long on EUR/USD, they are trading in CFD’s and on closing the trade, the trader makes a profit or loss depending on the change in the price. For more info on CFD’s, do check out Trader’s Way.