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Definition

A derivative contract that is not guaranteed by any organised exchange - which means that the counter-party risk is carried by the person buying or selling the contract. CFD's are a kind of bet - where one party bets that a certain instrument (like a share) will go up and the other bets that it will go down. Whoever is right takes money away from whoever is not. They are highly leveraged and very risky. We would advise you to stay away from all derivative instruments, including CFD's.

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