CFD is a contract for difference, a contract between you and your CFD provider to settle the difference in cash between the price at which you buy the CFD and the price at which you sell.
The price of the CFD mirrors the price of the underlying instrument (share, index or metal price).

It means, for example, that instead of buying and selling physical stocks, the CFD buyer gets access to the performance – price movements of the same stocks – without ever having to take delivery of them. CFDs originated in 1980s in the interbank market, they are used by the banks and institutions to hedge their share positions and are known as equity swaps.