Your capital is at risk. CFDs can result in losses that exceed your initial deposit. Please ensure you fully understand the risks involved.

Why is overnight funding charged and how is it calculated?

If you hold a short-term trade and want to keep it open overnight, you’ll be charged a daily interest fee. This charge will be applied to cash CFD positions held through the daily cut off time.

The daily cut off time is 10pm UK time. However this may vary for international markets.

Note, futures and forwards don’t incur overnight funding charges, but they do have wider spreads. These contracts are typically used for longer-term trades.

Why is overnight funding charged?

When trading a CFD, you’re using leverage. This means you are effectively being lent the money required to open your position, outside the initial deposit you’ve paid. To keep your position open after the daily cut off time an interest adjustment will be made to your account to reflect the cost of funding your position overnight, plus a small admin fee.

How can I see what I've been charged?

Overnight funding charges appear as separate transactions on your account and won’t affect your running profit/loss. A statement which contains all trades and associated charges is automatically sent to your registered email address at the end of each day.

Indices

For each day that a cash CFD position is open on a stock index, adjustments are calculated to reflect the effect of interest and dividends (if applicable).

Cost currency is determined by the currency of the underlying asset for CFDs.

LIBOR is calculated according to the currency of the underlying instrument.

Please note that open positions held through 10pm (UK time) on Fridays will be adjusted for three days’ worth of funding to cover the weekend.

Please also note that we price our Volatility Index (VIX) and EU volatility Index contracts in a different way to the rest of our cash index markets. Please refer to the 'other markets' section further below.

Formula:

Number of contracts x value per contract x price x (2.5% admin fee +/- LIBOR%) ÷ 365

*Mini contracts incur a 3% admin fee

* Price = price at 10pm (UK time) + if long – if short

365-day divisor used for the FTSE 100 and other GBP, SGD and ZAR denominated markets.
360-day divisor used for all other markets.

Example:

You’re short two contracts on the US Tech 100
The contract value is $100
The 10pm (UK time) price is 6957
The 1-month US LIBOR rate* is 1.53%

Cost = 2 x $100 x 6957 x (2.5% - 1.53%) ÷ 360
= $1,391,400 x 0.97% ÷ 360

= $37.49 overnight charge

*We use US LIBOR and the 360-day divisor since you're trading the US index in USD

Shares & ETFs

Cost currency is determined by the currency of the underlying asset for CFDs.

LIBOR is calculated according to the currency of the underlying instrument.

Borrow charge: When you are shorting a stock via cash CFD, you will incur a borrow charge. The borrow charge will be accounted for in a daily cash adjustment applied to your account. The charge varies according to the stock, is notified to us by our brokers or agents and includes a 0.5% administration fee. The borrow charge, and the ability to hold a short position, can be changed at short notice. To determine whether a borrow charge applies and if so, what the charge is, call our dealers in advance of trading.

Please note that open positions held through 10pm (UK time) on Fridays will be adjusted for three days’ worth of funding to cover the weekend.

Formula:

Number of contracts x value per contract x price x (2.5%* +/- LIBOR%*) ÷ 360

*Mini contracts charged 3% admin fee

* Price = price at 10pm (UK time) + if long – if short

365-day divisor used for the FTSE 100 and other GBP, SGD and ZAR denominated markets.
360-day divisor used for all other markets.

Example:

You’re long 1500 contracts on Commonwealth Bank of Australia
The contract value is AUD 1
The closing price is 83.90
The 1-month AUD LIBOR rate is 1.89%

Cost = 1500 x 1 x 83.90 x (2.5% + 1.89%) ÷ 360

= A$125,850 x 4.39% ÷ 360

= A$15.35 overnight charge

Forex

For forex and spot metals deals, we charge the tom-next rate plus an admin fee of 0.8%.

What is the tom-next rate? Find out more here.

Please note that forex positions held through Wednesday 10pm (UK time) will incur three days’ worth of funding to cover the settlement of trades over the weekend. This is because FX settles on a T+2 basis. Therefore, when a position is held through Wednesday 10pm (UK time) it’s effectively being held through the weekend as positions can’t be settled until after Friday 10 pm (UK time). Subsequently, holding through Friday will only incur one day’s worth of funding.

The easiest way to work out overnight funding costs on FX pairs is to look up the swap rate on our platform (click here to find out how to do this).

Formula:

Long:
Number of contracts x value of contract x offer swap rate

Short:
Number of contracts x value of contract x bid swap rate

Example:

You’re long one AUD/USD $10 contract
The AUD/USD swap offer is -0.15

1 x $10 x -0.15 = $1.50 debit

What is the base calculation for FX funding?

Formula:

There are three steps to this formula:

1. Value

Price in points x 0.3% (0.8% for mini contracts) ÷ 360

2. Swap rate

When going short:
Tom-next rate – value

When going long:
Tom-next rate + value

3. Cost

Number of contracts x value of contract x swap rate

Example:

You’re short one EUR/USD standard lot
The contract value is $10
The tom-next rate is 0.34 bid/0.39 offer
The closing spot price is 1.0650

Value = 10650 x 0.3% ÷ 360 = 0.08875
Swap rate = 0.34 – 0.08875 = 0.25 (rounded)

Cost = 1 x $10 x 0.25 = $2.50 credit*

*This is a credit since the bid interest rate is lower than the offer rate and you are holding a short position.

Commodities

Prices for commodity cash CFDs are synthetically created using the two most liquid futures contracts. This will result in a natural movement between these two contract prices and will be included in overnight funding adjustments. You’ll then either be debited or credited depending if you’re long or short, and whether the next future contract price is higher or lower.

To find out more on how we price our commodities, please click here.

Commodity funding is based on the market cost of carry, plus an admin fee of 2.5% per annum.

Please note that open positions held through 10pm (UK time) on Fridays will be adjusted for three days’ worth of funding to cover the weekend.

Formula:

There are three steps to this formula:

1. Basis (the daily movement along the futures curve)

(P3 – P2) ÷ (T2 – T1)

T1 = expiry date of the previous front future
T2 = expiry date of the front future
P2 = price of front future
P3 = price of next future

2. IG charge

Price x 2.5% ÷ 365

3. Adjustment

(Number of contracts x value per contract) x (basis + IG charge)

Example:

You’re short one A$10 contract on Oil – US Crude
T2 – T1 = 31 days
P2 price is 4700
P3 price is 4770

Basis = (4770 – 4700) ÷ 31 = A$2.258
IG charge = 4700 x 2.5% ÷ 365 = A$0.322

Adjustment = (1xA$10) x (A$2.258 - A$0.322) = A$19.36*

*A$19.36 will be credited to your account as you were short, and the next future contract was higher than the front contract.

Cryptocurrencies

For bitcoin, the overnight funding rate is 0.0347% (12.5% per annum). For other cryptocurrencies, the overnight funding rate is 0.0556% (20% per annum). Holders of long positions will have the applicable rate debited, while holders of short positions will receive a credit of the applicable rate. Additionally, we charge an admin fee of 0.0208 (7.5% per annum), payable by both long and short position holders.

Formula:

Long position:
Number of contracts x value per contract x price x (IG fee + overnight funding rate)

Short position:
Number of contracts x value per contract x price x (IG fee - overnight funding rate)

Example:

You are short 20 lots of Litecoin
The contract value is A$1
The current price is 31.26

Cost = (20 x A$1 x 31.26) x (0.0208% – 0.0556%)
= A$625.20 x -0.0348%
= A$21.75 debit

Other markets

Overnight funding for the following instruments is calculated in the same way as for commodities without fixed expiries:

EU Volatility Index, French OAT, German Bobl/Bund/Buxl/Schatz, Italian BTP, Japanese Government Bond, UK Long Gilt, US 2-Year/5-Year/10-Year T-Note, US Dollar Basket, US Treasury Bond, US Ultra Treasury Bond, Volatility Index.

Prices on these markets for cash CFDs are synthetically created using the two most liquid futures contracts. This will result in a natural movement between these two contract prices and will be included in overnight funding adjustments. You’ll then either be debited or credited depending if you’re long or short, and whether the next future contract price is higher or lower.

Funding is based on the market cost of carry, plus an admin fee of 2.5% per annum.

Please note that open positions held through 10pm (UK time) on Fridays will be adjusted for three days’ worth of funding to cover the weekend.

Formula:

There are three steps to this formula:

1. Basis (the daily movement along the futures curve)

(P3 – P2) ÷ (T2 – T1)

T1 = expiry date of the previous front future
T2 = expiry date of the front future
P2 = price of front future
P3 = price of next future

2. IG charge

Price x 2.5% ÷ 360/365

3. Adjustment

(Number of contracts x value per contract) x (basis + IG charge)

365-day divisor used for the FTSE 100 and other GBP, SGD and ZAR denominated markets. This divisor will also be applied to all commodities denominated in CNH.

360-day divisor used for all other markets.

Example:

You’re short 100 contracts on the Volatility Index

The contract value is $100
T2 - T1 = 31 days
P2 price is 15.50
P3 price is 16.50
Basis = (16.50 - 15.50) ÷ 31 = £0.03
IG charge = 15.50 x 2.5% ÷ 365 = $0.001

Adjustment = $100 x ($0.03 - $0.001) = $2.9*

*$2.9 will be credited to your account as you were short, and the next future contract was higher than the front contract.