CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% 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.
When you hold a Contract for Difference (CFD) position overnight, a fee known as an overnight financing charge may be deducted. This cost arises because, in CFD trading, you're essentially borrowing funds to maintain your position, and the overnight fee compensates for this borrowing.
💡 Example
Let's say you hold a position with EUR/USD, and the type is short (sell). The instrument price is 1.04055, and the trade size is 13,000 units. With an overnight interest rate of 0.0092% (0.000092) and a margin of €432.90, the system displays an overnight interest charge of -€1.19.
To determine whether the system’s calculation is correct, we first find the position value:
Position Value = 13,000 × 1.04055
Position Value ≈ €13,527.15
Next, we calculate the annual holding cost:
Annual Holding Cost = €13,527.15 × 0.000092 × 365
Annual Holding Cost ≈ €454.82
Finally, dividing by 365 gives the overnight cost:
Overnight Cost = €454.82 ÷ 365
Overnight Cost ≈ €1.19
This confirms that the displayed overnight charge of -€1.19 matches the calculation.