CFD is an acronym for contract for difference. When you buy a CFD on shares, metals, commodities, or Forex etc., you do not buy, own, or sell the actual asset. Instead, you are exchanging the differences in the buying and selling price when you open and close your position. CFDs are leveraged financial instruments, meaning that you can gain exposure to a wider financial market with a smaller capital or margin. While you may be able to amplify your potential profits, your potential losses are magnified as well.