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Contract for differences


Stock Exchange transactions are controlled by the normal rules of contract. Contracts for differences on the Stock Exchange come into a slightly different category. There is no deliberate intention to take or sell stocks and shares - the investor buys and sells on the same account, receiving or paying the difference. These are known as dealings in differences and are, strictly speaking, wagers governed by the rules relating to wagering contracts.

Reference: The Penguin Business Dictionary, 3rd edt.