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.^*
^*For US Shares, the cut off time will be 8pm (New York Time) Monday to Thursday and 10pm (UK time) on Friday

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.

How is overnight funding calculated for each market?

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. Interest rate benchmark 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.
	Formula: Number of contracts x value per contract x price x (3% admin fee+/-SOFR%*) ÷ 360
	* 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 SOFR rate* is 1.53% Cost = 2 x $100 x 6957 x (3% - 1.53%) ÷ 360 = $1,391,400 x 1.47% ÷ 360 = $56.82 overnight charge *We use SOFR rate 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. Interest rate benchmark 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 (3%+/-SOFR%*) ÷ 360
	* 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 Tesla Inc The contract value is $1 The closing price is 83.90 The SOFR rate is 1.89% Cost = 1500 x 1 x 83.90 x (3% + 1.89%) ÷ 360 = $125,850 x 4.89% ÷ 360 = $17.09 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 3% 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 3% ÷ 365

3. Adjustment

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

Example:

You’re short one $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 3% ÷ 365 = $0.386

Adjustment = (1x$10) x ($2.258 - $0.386) = $18.72*

_{*$18.72 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).

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:

Overnight funding for long bitcoin position
Long 1 contract on Bitcoin , which is currently trading at a price of 30,000.
( 1 x 30,000 ) x 0.0694% = $20.82
Client will be charged $20.82 funding per day.

Overnight funding for short bitcoin position
Short 1 contract on Bitcoin, which is currently trading at a price of 30,000.
( 1 x 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, 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 3% 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 3% ÷ 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 3% ÷ 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.}

Why is overnight funding charged and how is it calculated?

Why is overnight funding charged?

How can I see what I've been charged?

How is overnight funding calculated for each market?

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