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CFD Charges
As with most financial products, there are charges associated with trading Contracts For Difference (CFDs). Our aim here is to provide you with a clear understanding of the charges when trading Share and Index CFDs with Spread Co.
Commissions
Spread Co does not charge you commissions for opening or closing a CFD position. The prices quoted by Spread Co on the trading platform or over the telephone are live prices and include any price adjustments from the underlying market prices. This creates price transparency, giving you efficient execution on a given trading instrument at the spreads you can see in front of you, which are updated in real-time.
Financing
Financing charges only occur when a position is held overnight. For long positions, you will then be charged the daily equivalent of LIBOR (please see “Glossary” for an explanation of LIBOR), plus a certain percentage per annum (for example 2% per annum). For short positions you will receive the daily equivalent of LIBOR less a certain percentage per annum (for example 2% per annum). See Examples of Financing Charges:
Example 1 - Buying an Index CFD
You decide to buy 10 contracts of the FTSE 100 Index and are quoted 6450/52 by way of the spread.
Opening Trade
| Contract | Buy / Sell | Price | Trade Value | Margin Requirement |
| FTSE 100 Index | Buy | 6002 | £60,020 (10 x 6,002) |
£600.20 (1% of £60,020) |
Financing
You decide to hold the position for 1 night, and thus incur 1 night's financing charge. Assuming that the financing rate is 7.00% p.a. (LIBOR of 5.00% +2%) and the closing price for the day is 6020, you will be charged £11.55 for holding the position overnight.
Number of FTSE contracts open x Closing price x (LIBOR +2%) = Financing
Number of days in a year
In this example:
10 x 6020 x 7.00% = £ 11.55
365
On day 2, the FTSE 100 Index is trading at 6048/50, and you decide to close the position.
Closing Trade
| Contract | Buy / Sell | Price | Trade Value | Margin Requirement |
| FTSE 100 Index | Sell | 6048 | £60,480 (10 x 6048) |
£604.80 (1% of £60,480) |
Transaction summary
| Closing Trade Value | £60,480 |
| Opening Trade Value | £60,020 |
| Trade Profit | £460 |
| Financing Charge (1 day) | -£11.55 |
| Overall Trade Profit | £448.45 |
Example 2 - Selling a Share CFD
You decide to sell 10,000 British Telecom (BT) Shares and are quoted 250.00/250.30 by way of the spread.
Opening Trade
| Contract | Buy / Sell | Price (p) | Trade Value | Margin Requirement |
| BT | Sell | 250.00p | £25,000 (10,000 x 250.00p) |
£1,250 (5% in this example of £25,000) |
Financing
You decide to hold the position for 1 night, and thus receive 1 night's financing. Assuming that the financing rate is 3.00% p.a. (LIBOR of 5.00% -2%) and the closing price for the day is 251.00, you will receive £2.06 for holding the position overnight.
Number of Shares x Closing price x (LIBOR +/-2%) = Financing
Number of days in a year
In this example:
10,000 x 2.51 x 3.00% = £ 2.06
365
On day 2, BT is trading at 255.00/30, and you decide to close the position.
Closing Trade
| Contract | Buy / Sell | Price | Trade Value | Margin Requirement |
| BT | Buy | 255.30 | £25,530.00 | £1,276.50 |
Transaction Summary
| Opening Trade Value | £25,000 |
| Closing Trade Value | £25,530 |
| Trade Loss | (£530) |
| Financing Charge (1 day) | £2.06 |
| Overall Trade Loss | (£527.94) |
Dividends
Spread Co will make adjustments to equity CFD positions that are open at the close of business the day prior to the ex-dividend event. For long positions (where you have bought the CFD based on the underlying shares), you will receive dividend payments (less a charge by Spread Co), and on short positions (where you have sold the CFD based on the underlying shares to buy back at a later date) you will be charged dividend payments. Dividend payments (debits) and receipts (credits) will be reflected in your trading account.
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