contract for difference

contract for difference
abbr CFD
A term used in the Financial Services Act 1986 to describe cash settled (See cash settlement) instruments, e.g. FTSE 100 futures, FRAs, swaps and spread betting. Dresdner Kleinwort Wasserstein financial glossary

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   The exchange of a fixed price asset for a floating price asset. In foreign exchange markets the term is used to describe the settlement of the difference between a contract rate and the eventual settlement rate.
   ► See also FX.

Financial and business terms. 2012.

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