CFDs are financial derivatives that allow traders to take advantage of prices moving up (long positions) or prices moving down (short positions) on underlying financial instruments and are often used to speculate on those markets. It does not involve ownership in the underlying asset at all.

http://en.wikipedia.org/wiki/Contract_fo...

CFDs don't involve owning any shares, a CFD is essentially just a contract between two people, a buyer and a seller based on the underlying value of the shares, not ownership of the shares http://www.myforexdot.org.uk/are-cfds-be...

I know trading shares and CFDs are very different, but they both involve stocks of businesses.

So what is the difference between them exactly? What are the pros and cons of each?

PS. Does owning a CFD mean the ownership of about 0.000000001% of the company?