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Glossary

CFD (Contract for Difference)

A leveraged derivative that pays the difference between a stock's entry and exit price. No share is owned and there are no shareholder rights.

A CFD lets you take a leveraged position on a stock's price without owning it. You pay financing to hold the position, gains and losses are magnified by leverage, and you can lose more than your initial margin.

There is no share, no dividend (only a cash adjustment) and no voting. CFDs are restricted or banned for retail traders in several jurisdictions, including the United States.

Related terms

Perpetual futureA derivative contract with no expiry date that tracks an underlying price using periodic funding payments between longs and shorts.
Tokenized stockA blockchain token representing a claim on a real share held by a custodian. The holder owns the token, not the underlying equity directly.