CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% 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.
The interest charged for maintaining a short stock CFD position is comprised of two components. One of them is variable - this is the borrow cost (updated daily) associated with the underlying stock tracked by the CFD instrument. The static component is the markup applied by Trading 212, which is fixed for the entire asset class - 10% (could be subject to change).
💡 Example:
Let’s say you place a short position with a CFD on Nikola Corporation. The borrow fee rate of the underlying stock is 0.1962 (19.62%). Our markup, as noted above, is 0.1 (10%). So, the combined annual rate for keeping the short position is 0.2962 (29.62%). The current price of the instrument is $0.60.
Based on the current price, the value of the position would equal $60 (the quantity of 100 shares multiplied by the price). The holding cost for maintaining the position for a calendar year would be 29.62% of the position value ($60), so:
0.2962 * $60 = $17.77
The overnight holding cost for 100 units would be calculated as follows:
Yearly holding cost / 360 = $17.77 / 360 = $0.05
📝 This calculation affects only short positions held with stock CFDs. For calculating interest on other positions, check here.