CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that 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 10pm (UK time).

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 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 10pm (UK time), an interest adjustment will be made to your account to reflect the cost of funding your position overnight.

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

= AUD 125,850 x 4.39% ÷ 360

= AUD 15.35 overnight charge

Forex For forex and spot metals deals, we charge the tom-next rate plus an admin fee of 0.5% or 0.8% (for mini contracts).

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.

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 EUR/USD $10 contract
The GBP/USD swap offer is -0.85

1 x $10 x -0.85 = $8.50 debit

What is the base calculation for FX funding?

Formula:

There are three steps to this formula:

1. Value

Price in points x 0.5% (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 0.5% ÷ 360 = 0.14791
Swap rate = 0.34 – 0.14791= 0.19 (rounded)

Cost = 1 x $10 x 0.19 = $1.90 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% ÷ 360

3. Adjustment

Bet size 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 = $2.258
IG charge = 4700 x 2.5% ÷ 365 = $0.322

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

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

Cryptocurrencies

If you are long, for Bitcoin you will pay a daily overnight funding charge of 0.0694% (25% per Annum) for positions held at 10pm UK time. For Ether/Bitcoin, and Bitcoin Cash/Bitcoin and Crypto 10 you will pay 0.0625% (22.5% per annum). For all other cryptocurrency positions you will pay 0.0764% (27.5% per-annum).

If you are short, for Bitcoin you will receive a daily overnight funding charge of 0.0139% (5% per Annum) for positions held at 10pm UK time. For Ether/Bitcoin and Bitcoin Cash Bitcoin you will pay 0.0208% (7.5% per annum). For Crypto 10 you will receive 0.0208% (7.5% per annum) and for all other cryptocurrencies you will receive 0.0347% (12.5% per-annum).

Please note that for any position held through 10pm (London time), we’ll make a daily interest credit or debit adjustment Monday to Sunday. Adjustments to the number of days charged will be made in advance of the Christmas and New Year holidays, to cover settlement of trades over these bank holidays

Formula:

Long position:
Number of contracts x value per contract x price x daily overnight funding charge


Short position:
Number of contracts x value per contract x price x daily overnight funding charge

Example:

You are short 1 contract of Bitcoin
The contract value is $1
The current price is 30,000
Cost = (1 x $1 x 30,000) x 0.0139%
= $30,000 x 0.0139%
= $4.17

Client will receive $4.17 funding per day.
Other markets Overnight funding for the following instruments is calculated in the same way as for commodities without fixed expiries:

EU Volatility Index and 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

(No. 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 1 contract on the Volatility Index

The contract value is $1000
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 = 1 x $1000 x ($0.03 - $0.001) = $29*

*$29 will be credited to your account as you were short, and the next future contract was higher than the front contract.