Trade the price change without owning it

Holding a CFD for months usually means paying...

Overnight financing every night

CFDs: trading the price, not the thing

Many apps let you trade gold or big US shares from a few dollars. Often you aren't buying gold or shares at all. You're trading a CFD.
A CFD (contract for difference) is a deal with your broker: you settle the change in price without owning the asset. No gold bar, no shareholder vote.
Say gold rises from US$4,000 to US$4,100 an ounce. A 1-ounce gold CFD pays you the US$100 difference. You can go long or short, usually with leverage.
Hold a CFD past the daily rollover and you pay, or sometimes receive, overnight financing. Over months, those nightly costs add up.
CFDs aren't allowed for retail traders in the US. In the EU and UK, brokers must show the share of retail accounts that lose money with them: often around 70 to 80%.
Common mistake
Myth: a CFD is a cheap way to own shares or gold. You own nothing and get no vote. Leverage magnifies your losses, and nightly costs keep running while you wait.
Key takeaway
A CFD is a leveraged contract on a price change, made with your broker. Know the costs and the loss figures before you ever use one.

With a CFD, you... Trade the price change without owning itA CFD only settles the difference between the opening and closing price. The asset itself never changes hands.
Holding a CFD for months usually means paying... Overnight financing every nightEach night past the rollover you pay (or sometimes receive) financing, so long holds get costly.
In which country are CFDs not offered to retail traders? The United StatesUS rules don't allow CFDs for retail traders. The UK and Australia allow them with leverage caps and warnings.
You short a 2-ounce gold CFD at US$4,200 and close at US$4,150. Result? +US$100Price fell US$50 and you were short 2 ounces: 2 × US$50 = US$100 profit, before costs.