A CFD, or Contract for Difference, is a financial agreement between two parties to exchange the difference in the value of an asset between the time the contract is opened and closed. CFDs allow traders to speculate on price movements of various assets, such as stocks, commodities, or indices, without actually owning the underlying asset. This can provide opportunities for profit in both rising and falling markets. CFDs are popular among traders because they offer leverage, meaning you can control a larger position with a smaller amount of capital. However, this also increases the risk, as losses can exceed the initial investment. It's important for traders to understand the risks involved and to use risk management strategies when trading CFDs.