When you purchase a stock, the shares are held by your broker on your behalf. You become the shareholder of record and are eligible to partake in certain voting and proxy meetings as part of the governance process. CFDs operate a bit differently, and there are some advantages that come with "real" stocks, and some that come with share CFDs. We'll sort out some of the differences below: Regulatory requirements: Unlike share CFDs, exchange-traded shares may involve certain regulatory and exchange fees, reporting requirements, and disclosures (i.e., if you own more than 10% of a public company it triggers a filing requirement in the U.S.). Dividends: Shareholders are eligible to receive potential dividends and other rights depending on the class of stock they hold (i.e. during a liquidity event or in the case of bankruptcy). When you are trading CFDs you have no such ownership rights or benefits. It's worth noting that some CFD brokers may still offer you the ability to receive dividends, in an attempt to mimic the trading of real (underlying) stocks. Stock certificates: As mentioned above, CFDs can replicate much of the experience that comes with owning an underlying stock, albeit with some exceptions. One such exception would be stock certificates. As CFD traders don't actually own any of the underlying assets, they aren't entitled to a certificate of ownership for any stock. A relic of the past, stock certificates today aren't as crucial as they once were. Few investors request to physically own the real stock certificates to which they are entitled (unless they plan on voting during shareholder meetings). Risk: Share CFDs - just like all CFDs - are risky investments, and carry additional risks that aren't present when trading underlying stocks. For example, during a fast market move, your broker may not have time to fill your position when trading a share CFD. Also, though your portfolio rarely plummets to zero when trading or investing in underlying stocks, it's possible to lose your entire balance (or even go into the negative) when trading share CFDs (due to leverage).