CFD stands for Contract for Difference. CFD is a financial instrument that allows traders to invest in an asset class without actually owning the underlying equity index, commodity or bond. The advantage to this structure is that the CFD trader carries no risk of having to take possession of the physical underlying asset.

A CFD (contract for difference) is a popular type of derivative product that gives traders the ability to speculate on, or hedge on movements in the underlying equity indices and commodities without the need to physically own those assets. That means traders don’t need to pay some of the associated costs of ownership such as account management fees, commissions, and, in some countries, stamp duty. A trader’s profit or loss from a CFD trade is determined by the difference between the price at which they buy it and the price at which they sell it, plus or minus any finance charges.

At OANDA you can trade the world’s most popular commodities such as brent crude oil, west texas oil, corn, natural gas, soybeans, sugar and wheat. See all the OANDAlive market rates in real time.

CFD finance charges, whether paid or received, are assessed using the discount rate associated with the CFD. OANDA applies a spread to the discount rate. OANDA publishes its CFD interest rates, expressed as bid and ask rates for each CFD in real-time on OANDA's Historical Interest Rates Tool. Your CFD finance charges on an open position will be netted; meaning that the rate earned or charged on a CFD trade will be the difference between the CFD interest rate and the interest rate on the currency. You will pay finance charges in the event of a negative interest rate and you will earn finance charges in the event of a positive interest rate.

You can trade CFDs on all OANDA platforms including the Desktop trading platform, Mobile trading apps for iOS and Android and OANDA MT4, provided your regulatory body allows CFD trades. Visit the OANDA Trading Platforms page to download our desktop and mobile versions on your choice of operating system.

CFD have no fixed lot requirements. Flexible order sizes give traders greater control in sizing their trade positions and allocating their portfolio.

Leverage offers the trader the ability to enter into a CFD contract using funds that represent only a fraction of its actual value. Used with caution, leverage can amplify your potential gains which are based on the full leveraged amount of the trade. However, it is important to remember that the leverage on a CFD, as with other types of trading, is a significant risk factor that can amplify both positive and negative results. You should have a clear understanding of the risks associated with margin trading. Please see OANDA's margin policies for more information.