Embarrassingly this is the first I’ve come across a crypto derivative contract called contracts-for-differences, or CFDs. So all those gamblers betting on horses or Manchester United can now play Bitcoin or other cryptos without having to actually buy the crypto.
Apparently these things are like options or futures contracts, only you make them directly with your broker. They’re also traded on margin so the losses can mount quickly, especially in crypto land where things move 20% in a blink. You also have major counterparty risk because depending on whom you trade with – they might not be able to pay you back. Or, they might just refuse to.
Good article here. Apparently these things are coming under heavy scrutiny from regulators. Seems best to stay away.