A contract for difference is not a difference, nor a contract, but a way of transaction.

In other words, this kind of transaction, which represents non-physical objects or does not directly hold the trading object, belongs to the trading mode of the birth of the derivatives market.

Contract for Difference (CFD) can reflect the price change of stock or index, and provide the profit or loss caused by price change, without actually owning stock or index futures.

For example:

Take stocks as an example: buying stocks and Huaye Real Estate and actually holding the actual equity of the company; In other words, no matter how many shares are issued, a company can only hold a corresponding number of shares;

Contracts for differences are different. What he trades can be a fictional product to cater to or satisfy a certain market demand. For example, we can suggest a concept, Huaye Real Estate Confidence Index, which can be used as a trading object and specify corresponding rules for trading, but it has no practical value in itself. It is just a virtual trading rule and market, which satisfies the pursuit of speculative market by stocks and traders. This is a contract for difference.