A contract for difference ("CFD") is a financial derivative. Derivative products tract the market price of an underlying asset so that traders can speculate on whether the price will rise or fall.

The price of a CFD is "derived" from the underlying asset's price.

A CFD is a contract, typically between a CFD provider and a trader, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade.

In other words, a CFD is basically a bet on a particular asset going up or down in value, with the CFD provider and you agree that whoever wins the bet will pay the other the difference between the asset's price when you enter the trade and its price when you exit the trade.