In plain English
Most retail "forex trading" with online brokers is done through CFDs or similar leveraged contracts. You never receive actual currency; you settle the difference between the opening and closing price.
Forex glossary
What Is CFD in Forex Trading?
Definition
A contract for difference: a leveraged product that lets you speculate on price movements without owning the underlying asset.
Updated
SaveRelated terms
- Leverage
- Borrowed exposure from your broker that lets you control a position much larger than your deposit. It magnifies both profits and losses.
- Forex broker
- A company that gives you access to the currency market through a trading account and platform, and holds your deposited funds.