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.
FX and spot metals funding
A tom-next rather than an interbank rate is used in the calculation of funding costs for forex and spot metals.
Tom-next is the day’s market swap rate for that pair or metal.
Example tom-next rate: -1.39/-0.39.
-0.39 would be used to calculate the funding cost on a long position.
-1.39 would be used to calculate the funding cost on a short position.
Size x (tom-next rate + admin fee)
CFD
Size means total value of lots (number of lots x value per lot)
Tom-next is the day’s market swap rate for that pair or metal
Admin fee is no more than 0.5% per annum (0.8% for mini contracts)
FX settlement of T+2 means that if you hold your trade past 10pm Wednesday (London Time) then you’ll need to incorporate the weekend into the calculation, and therefore you will have a three-day funding charge. This is because currency cannot settle during the weekend, and the new spot rate would therefore fall on a Monday.
FX settlement also cannot take place on public holidays. Therefore, you may see interest charges for a variable number of days if you hold your trade past these public holidays.
For example, if Friday is a public holiday, this means that if you hold your trade past 10pm on Tuesday (London Time), there will be a four-day funding charge instead of a one-day funding charge.
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