A CFD, or "Contract For Difference," is a financial instrument that allows investors to speculate on the price movements of an asset without actually owning it. When trading CFDs, you can open both long and short positions. Instead of buying the underlying asset, you agree to replicate the market conditions and settle the difference when the position is closed.
This method of investing provides flexibility and the opportunity to profit from market fluctuations without needing to acquire the actual asset. At the close of the position, the profit or loss is calculated based on the difference between the opening and closing prices.