A Contract for Differences (CFD) is an agreement between a buyer and a seller, where the buyer pays the seller the difference between the current value of an asset and its value at the contract time.

This contract is made between the trader and the broker, enabling the trader to trade price movements of various assets, such as stocks, currencies, or commodities.

A trader does not own the commodity itself. Rather, you are buying based on the movement of the commodity in the market and making a profit or loss based on that.