CFDs, in addition to trading directly in the financial markets, can be part of an investment strategy. They can be used, for example, to hedge against other products in your portfolio. For example, if you have a company's stock in you portfolio, you can hedge that position by opening a short position in a CFD of the same company. If the price of the stock falls, you would offset that potential loss in your stock portfolio with the gains from the shorted CFD.