FOREX TRADING : CONTRACT FOR DIFFERENCE CFD INTERPRETED

CFD or Contract For Difference means the contract in which the difference between the currency value at the time of contract and present currency value is paid to the seller. This encourages the vendor in buying such a currency which value is anticipated to increase and selling such a currency which value is speculated to decline. Such contracts are entered into, to guard against future losses through price fluctuations. CFDs are not accompanied by any consideration except the gain from fluctuation of the currency itself.