Glossary

CFD: what it means

A CFD, or contract for difference, lets you gain or lose on an asset's price change without buying the asset itself.

A CFD, or contract for difference, is an agreement with a broker under which you receive or pay the difference between an asset's price when the position is opened and when it is closed. You do not buy the share, currency or gold itself: you only hold a contract with the broker.

CFDs are usually traded with leverage, so losses can be fast. According to ESMA, 74 to 89% of retail CFD accounts lost money.

If you are interested in long-term investing, buying the shares or funds themselves without leverage works differently and has no margin calls.

In detail, with examples: Leverage, margin call and stop-out: how you can lose your whole deposit in a day

Related terms

Leverage Stop-out Investment profit

Figures used here

  • Retail CFD accounts losing money, lower bound74%
    ESMA data, 2018
  • Retail CFD accounts losing money, upper bound89%
    ESMA data, 2018

Checked against official sources on October 30, 2026. When a figure changes, it is updated on every page of the site.

Spotted a mistake or an outdated figure? and we will check it against the primary source and fix it.

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