A stock CFD is a contract for difference that tracks the price of a single company's share. It lets you trade on the share's price movement without owning the underlying share.
Opening a stock CFD means agreeing to exchange the difference in the share's price between the moment you open the position and the moment you close it. You can go long if you expect the price to rise or short if you expect it to fall, and you trade on margin, posting only a fraction of the full position value. Dividends are handled as cash adjustments: a long position is typically credited around the dividend amount, while a short position is debited.
Trading a stock CFD differs from buying the share outright. Buying the share makes you a registered shareholder with voting rights and a direct dividend entitlement. A stock CFD gives you neither ownership nor a vote: you hold a contract on the price, you can apply leverage, and you can profit from a falling price as readily as a rising one. Most retail traders lose money trading CFDs, because leverage magnifies losses as well as gains.
You expect a share priced at USD 50 to rise, so you buy 100 stock CFDs. The price climbs to USD 55 and you close the position:
100 √ó (USD 55 - USD 50) = USD 500
You make USD 500 on the price move without ever owning a share. Had the price instead fallen to USD 45, you would have lost USD 500, and because the position is leveraged, the loss is large relative to the margin you posted.