Offer your thoughts or opinion on the input financial query or topic using your financial background.

What am I actually buying when trading in CFDs
The product itself is a derivative as it derives its value from another stock or commodity.  It's similar to a US option, which offers (in the case of a 'call') the right, but not the obligation to buy a stock at a predetermined price before a certain date. But, unlike the US option, instead of buying the stock, the contract is only closed out in cash. I've made the analogy to betting, so I believe it to be a fair comparison. I hope this question is theoretical. You should never buy a financial instrument with no clue how it works.