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Trading contracts for difference (CFDs) is a way of speculating on financial markets that doesn't require the buying and selling of any underlying assets. A contract for difference (CFD) is a way of trading on the price movement of stocks, commodities, forex and cryptocurrencies without owning them.CFD is a long-term contract between a generator and the Low Carbon Contracts Company to incentivise investment in UK low-carbon electricity generation. They offer exposure to the markets while requiring you to only put down a small margin ('deposit') of the total value of the trade. Contracts for difference (aka CFDs) mirror the performance of a share or an index. The Contracts for Difference ( CfD ) scheme is the government's main mechanism for supporting lowcarbon electricity generation. Contracts for difference, or CFDs, are essentially agreements between a trader and broker on the future price movement of an underlying asset. CFDs are leveraged products. A contract for difference (CFD) outlines a buyer's obligation to pay any price difference that might occur due to the shifting valuation of an asset.