Overnight Financing Examples for CFDs

By November 8, 2012 Support

Below are a number of examples showing how Overnight Financing is calculated for CFD trading products.

1. Indices

UK Indices

SELL 10 CFDs of UK 100 Cash CFD

Unit risk: 1 (0.5% – 2.5%)
Applicable interest rate: - 2.0%
Closing price: 4722

[4722 x 10 x -2%] / 365 = – £2.59

Please note that as this has returned a negative value, your account would be debited rather than credited with £2.59 as overnight financing..

US Indices

BUY 1 CFD of Wall Street Cash CFD

Unit risk: 1 (1.0% + 2.5%)
Applicable interest rate: 3.5%
Closing price: 10350

[10350 x 1 x 3.5%] / 365 = $0.99

Your account would be debited $0.99 for holding this position overnight.

2. Currencies (Forex)

BUY 1 CFD of GBP/USD spot CFD

Unit risk: 0.0001 (1.0% – 0.5% + 2.5%)
Applicable interest rate: 3.0%
Closing price: 1.8550

[(1.8550 / 0.0001) x 1 x 3.0%] / 365= 1.52

Your account would be debited $1.52 as overnight financing.

SELL 5 CFDs of GBP/USD spot CFD

Unit risk: 0.0001 (1.0% – 0.5% – 2.5%)
Applicable interest rate: - 2.0%
Closing price: 1.8550

[(1.8550 / 0.0001) x 5 x -2.0%] / 365 = -5.08

Your account would be debited $5.08 as overnight financing.

Please note that as this has returned a negative number but this is a sell position, instead of you receiving the money you will be paying it.

The rates used for the examples above are indicative and are not necessarily representative of correct rates.

LCG has the right to vary Overnight Financing interest rates, spreads or commission rates on any contract or vary the Size specifications without notice especially in, but not limited to, volatile market conditions and/or illiquidity of the Underlying Market. At LCG’s discretion quoted spreads made via the telephone may differ from the spreads available on an OTP or a DTP.

Trade

CFD Trading involves significant risk.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
64.4% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Professional clients can lose more than they deposit. CFD trading involves significant risk.
Read full Risk Warning Notice.

Price Markets UK Ltd (Price Markets) is a company registered in England and Wales under registered number: 09597543.
Price Markets is authorised and regulated by the Financial Conduct Authority (FCA) under firm reference number: 725804.

Office: 60 Gresham Street, London EC2V 7BB, United Kingdom.
Registered address: 35 Ballards Lane, London N3 1XW, United Kingdom.