Financing charges

If you carry a CFD Share position overnight, it incurs a financing cost. Financing is calculated on 100% of the value of the position. You will incur financing for each calendar day that you rollover a position, including weekends. We calculate financing using the applicable benchmark rate (determined by the currency used to denominate the product in question e.g. LIBOR for GBP) +2.5% for long positions and -2.5% for short positions. This means that whether you take a long or a short position you may be debited or credited for financing. Financing on Commodity and Treasury CFDs is factored into the futures price and therefore no overnight rates will apply. Financing is charged on any equity positions held overnight (positions open at 22.00 London time).

How to calculate financing using a share CFD example

Long position

• You buy 3,000 share CFDs of a particular UK stock at 150p and decide to hold the position overnight
• 3,000 x 150p = £4,500 (this is the value of your position)
• You are then charged interest at the official overnight LIBOR rate + 2.5%. This is multiplied by your total market exposure and divided by 365 days to give the daily overnight rate
• 5% + 2.5%* = 7.5%
• £4,500 x 7.5% = £337.50 / 365 = 92p
• Approximately 92p will be debited from your account for every night you hold the position open

Short position

• You sell 3,000 share CFDs of a UK stock at 150p and decide to hold the position overnight
• 3,000 x 150p = £4,500 (this is the value of your position)
• You are then credited an amount calculated by using the official LIBOR rate – 2.5%. This is multiplied by your total market exposure and divided by 365 to determine the daily overnight rate paid by you
• 5% - 2.5% = 2.5%
• £4,500 x 2.5% = £112.50 / 365 = 31p
• You will be paid approximately 31p for every night you hold the position open

LIBOR (London Interbank Offered Rate). When you trade using margin, NatWest Index is effectively lending you money to cover the cost of your trading position. NatWest Index make a charge for this.

* NatWest Index reserves the right to amend this rate with prior notice.