A CFD (Contract for Difference) is a financial instrument that allows traders to profit from changes in the price of various assets — such as stocks, indices, commodities, or currencies — without actually owning them. When trading CFDs, you simply predict whether the price will rise or fall. If your prediction is correct, you earn the difference between the opening and closing price. CFDs give investors flexibility, the ability to trade with leverage, and access to global markets, but they also involve higher risk, so understanding how they work is essential before you start.