For a short position on the same market, the calculation would be the same except that LIBOR would be deducted from our 2.5% admin fee. Mini contracts incur a 3% admin fee.
Forex and spot metals
For forex and spot metals deals, we charge the tom-next rate plus an IG's charge for holding positions overnight of 0.0022% a day.
Tom-next, an industry-standard rate, is short for 'tomorrow-next day', and is the means by which forex speculators are able to keep forex positions open overnight without taking physical delivery of a currency. They manage this by swapping any overnight positions for an equivalent contract that starts the next day. The price difference between the two contracts is called the tom-next adjustment.
To give an example, let’s say you’re trading on a forex pair for which the tom-next rate is -1.39/-0.39. In this case we’d use:
- -0.39 to calculate the funding cost on a long position
- -1.39 to calculate the funding cost on a short position
And our calculation would look like this: