My understanding of CFDs is that the profit you make on a CFD is the difference between the price at which you bought the CFD and the price at which you sold your CFD minus various charges/commission.
The idea being that the CFD tracks the underlying and therefore you can speculate on the price of the underlying.
My question is, why does the CFD track the underlying? There is nothing about the CFD that forces it to follow it is there? Or is there?
Edit: To clarify the question... The CFD is priced according to supply and demand The underlying is priced according to supply and demand These two are priced independently. Isn't it possible that they move completely independently of each other?