CFD or contracts For Difference
Contracts for Difference (also known as CFD) trading is primarily a stock market traded instrument.CFD’s are not allowed in U.S Markets.CFD profits are made on the expected variation in prices of shares traded.CFDs are financial derivatives that enable investors to capitalize on price movements take (long positions) or prices are moving downward (short positions) on the underlying financial instruments, and is often used to speculate in these markets.This trading instruments are flexible to allow traders the ability to go long and short.Along with shares and bonds traders can trade in commodities also.
In the financial world, CFD is considered a contract between a “buyer” and a “sell”. The contract stipulates that the person who sells a stock, the buyer the difference between current stock and the value to be paid when signing the contract.
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http://en.wikipedia.org/wiki/Contract_for_difference