A CFDs is an agreement to exchange the difference in the value of an asset from the time the contract is opened until the time of which it’s closed. With a CFDs you never actually own the asset or instrument you have chosen to trade, but you can still benefit if the market moves in your favor, or make a loss should the market move against you.
CFDs are a leveraged product, which means that you only need to deposit a small percentage of the full value of the trade in order to open a position. This is called ‘trading on margin’. While trading on margin allows you to magnify your returns, losses will also be magnified as they are based on the full value of the position, meaning you could lose more than any capital deposited