CFDs are two-party contracts. By doing so, they agree to pay the difference between a market's opening and closing prices. Therefore, it is a method of speculating on price change without owning the underlying item.

Performance of the CFD is directly correlated with the underlying asset. Profit and loss are determined by how the underlying asset's value moves relative to its opening price.

You do not own the underlying asset when you trade CFDs through a broker. You are guessing on the direction of the price movement, upwards or downwards.