The trader chooses an asset offered as a CFD by the broker. It could be a stock, an index, a currency or any other asset that the broker has in their selection.The trader opens the position and sets parameters such as whether it’s a long or short position, leverage, invested amount, and other parameters, depending on the broker.The two engage in a contract, agreeing what the opening price for the position is, and whether or not additional fees (such as overnight fees) are involved.The position is opened and remains open until either the trader decides to close it or it is closed by an automatic command, such as reaching a Stop Loss or Take Profit point or the expiration of the contract.If the position closes in profit, the broker pays the trader. If it closes at a loss, the broker charges the trader for the difference.To learn more about how CFDs work, click here.