CFD Trading has been quite popular for some time now. Also known by the term “commodities trading”, it signifies the action of a trader realizing the value of the difference between the starting and final price of a certain amount of commodity. The full form for CFD is “Contract for Difference”. This is an instrument which can be employed to understand well the factors which causes movement in the price of a particular commodity. There is no restriction regarding the nature of the commodity traded; it could be anything from gold, silver, oil to cereal grains. There might be a bit of confusion here, so let’s clear it up: None of the assets or “commodities” are actually owned or traded by the person engaged in CFD trading. It is only the difference in the price movements of a certain amount of a particular asset that is bid upon. It is in essence, a bit like gambling; the trader “predicts” the exact increase or decrease in price and sets a price accordingly, and if the prediction bears fruit, then the broker pays the balance (difference between the start and end pricing) to the trader. If the reverse happens, then the trader suffers a loss, and sometimes end up making up for the losses from his own pocket.