CFDs let a trader gain leveraged exposure to a stock, index, commodity or currency pair without ever owning the underlying. The broker quotes a bid/ask with a small spread, and the trader posts margin against the notional. Profit and loss accrue mark-to-market; the broker charges overnight financing on long positions and may pay or charge on shorts.
CFDs are popular outside the US — particularly in the UK, EU and Australia — because they are tax-efficient in some jurisdictions and offer broad market access (US stocks, indices, FX, commodities) from a single account. eToro, IG, Plus500, CMC Markets and Saxo Bank are major CFD brokers.
CFDs are illegal for retail US persons under SEC and CFTC rules. They are also banned in Hong Kong and Singapore in their retail form. The buystock.net broker matrix tracks CFD vs spot vs futures availability explicitly for non-US visitors evaluating which product to use for US equity exposure.