Spread Betting and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.7% of retail investor accounts lose money when trading Spread Betting and CFDs with this provider. You should consider whether you understand how Spread Betting and CFDs work and whether you can afford to take the high risk of losing your money
Costs of Trading
Account charge
Holders of Spread Betting or CFD trading accounts incur zero account fees.
Spread
A market is quoted with 2 prices, the first is the Bid, which is the price you sell, the second is the offer, which is the price you pay to buy.
| UK100 In Hours Example | |
|---|---|
| Bid | Offer |
| 7685.4 | 7686.2 |
The narrower the spread, the smaller the price movement required to start generating a profit. This varies depending on several trading factors, including asset class, liquidity, and volatility.
During less active trading sessions, spreads may widen. For instance, the UK100 has a spread of 0.6 during UK equity trading hours. However, outside of these hours, the spread widens to 1.8.
Spread Co offers fixed* spreads for Index, FX & Commodities to provide clients with confidence in entry and exit spreads during and outside of cash market trading hours. To view the spreads, please refer to the market information pages.
*Up to £50 per point
Commissions
No commissions beyond the fixed* trading spread are charged on Commodity, FX, or Index markets.
Information regarding the additional commission charged on equities can be viewed on the market information page.
Equity spreads are subject to variation due to a variety of factors, particularly in volatile markets or abnormal market situations where the market may be affected by third-party factors.
Prices are adjusted for market bid/offer spreads plus or minus our spread, which is calculated as a percentage basis.
Example, Barclays Bid/Offer is 185-186, with a commission of 5 Basis points or 0.005% built into the spread quoted.
The final spread for client trading would be 184.91 – 186.09
185.00 * 0.9995% = 184.91
186.00*1.0005 = 186.09
*Up to £50 per point
Overnight Funding
Overnight funding is charged/paid on positions held overnight as a Spread Bet or CFD.
No overnight charges are applied to markets with a contract expiry / market with a contract date. For example a dated futures market UK100 DEC 23 or USCRUDE OIL SEP 23.
Positions held through 10pm daily when the business ends are subject to overnight charges and the closing valuation is the basis for any credit or debit made on an account.
Forex & Spot Commodities
Overnight charges on FX positions are determined by swap points, which are derived from the underlying Tom/Next Rates. These swap points are calculated based on the interest rate differential between the currency pairs being traded. For instance, if a trader is long on a currency pair with a net positive interest rate differential, they will receive a swap credit. Conversely, if they hold a short position, they will be charged.
It’s important to note that the position’s direction alone does not determine the credit or debit, but rather the interest rate differential of the Forex pair. The Tom/Next rates enable trading of Forex over two business days: tomorrow and the next day. Positions held past 10 pm, when the business day ends, are subject to overnight charges, and the closing valuation is used to calculate any credit or debit made on the account.
If a position is held at the end of the day (10 pm) on Wednesday, a three-day rollover charge/credit will be applied. Forex settles on a T+2 basis, which means that if a position is held at the end of Wednesday, T+2 would be a Saturday. However, as banks are not open on Saturdays, the currency cannot be settled until Monday. If there is a currency holiday on Monday, then the rollover charge/credit will be for four days, up to the next settlement day.
Traditional charge cycle for a position in GBPUSD on a normal cycle held at the close of business 10pm.
| Monday 10pm Close position | Credit/ Debit 1 Day |
| Tuesday 10pm Close position | Credit/ Debit 1 Day |
| Wednesday 10pm Close position | Credit/ Debit 3 Day |
| Thursday 10pm Close position | Credit/ Debit 1 Day |
| Friday 10pm Close position | Credit/ Debit 1 Day |
| Short | Long | ||
|---|---|---|---|
| Positive Bid | Positive Offer | ||
| Paid | Short = Quantity * Bid Swap | Long = Quanity * Offer Swap | Charged |
| Negative Bid | Negative Offer | ||
| Charged | Short = Quantity * Bid Swap | Long = Quanity * Offer Swap | Paid |
Index
Overnight financing is applied to positions to cash markets overnight.
Calculation formula
Spread Betting: ((Closing price * Size) * Rate)/365 Days
CFD: (((Closing price * Size) * Rate)/days)
EUR, 365 days a year
USD, 360 days a year
GBP, 365 days a year
| Monday 10pm Close position | Credit/ Debit 1 Day |
| Tuesday 10pm Close position | Credit/ Debit 1 Day |
| Wednesday 10pm Close position | Credit/ Debit 1 Day |
| Thursday 10pm Close position | Credit/ Debit 1 Day |
| Friday 10pm Close position | Credit/ Debit 3 Day |
Equities
Overnight financing is applied to positions in cash market overnight.
Calculation formula
Spread Betting
Equities – GBP Spread Betting Account
(((Closing price * Size)/100) * Rate)/365
All Other Equities & ETF’s
((Closing price * Size) * Rate)/365
Short selling restrictions
There may be instances where borrow costs are applied to certain equity short positions due to the equity being difficult to borrow, or if there is a risk of recall against the position. There are also restrictions on equities that cannot be shorted, though changes in the market environment could impact availability. When attempting to short sell without obtaining borrowable equity, it is known as naked short selling, and we generally do not permit clients to engage in this practice when obtaining borrowable equity is challenging. However, all short positions carry a risk of recall if borrowable equity becomes unavailable in the future.
To prevent sudden sell-offs, the uptick rules dictate that short-selling can only occur after the price of a particular market has increased. Short-sale restrictions are implemented to maintain market stability by prohibiting the short-selling of equities that have declined by a certain percentage during a trading session.
CFD
Calculation for CFD overnight financing calculations
EUR ((Closing price * Size) * (Rate)/365 days) EUR
USD ((Closing price * Size) * (Rate)/360 days) USD
GBP (((Closing price * Size)/100)* (Rate)/365 days) GBP
| Monday 10pm Close position | Credit/ Debit 1 Day |
|---|---|
| Tuesday 10pm Close position | Credit/ Debit 1 Day |
| Wednesday 10pm Close position | Credit/ Debit 1 Day |
| Thursday 10pm Close position | Credit/ Debit 1 Day |
| Friday 10pm Close position | Credit/ Debit 3 Day |
Commodity Futures
Dated commodity contracts do not incur overnight financing charges as the cost of carry is already included in the contract price until its expiry date.
At Spread Co, Spot Gold and Spot Silver are the only commodities traded on a spot basis. Overnight charges for these commodities are applied in the same manner as Forex overnight funding.
Currency Conversions
Spread Betting
All trades are executed in the account currency, and we do not facilitate transactions in multiple currencies.
When trading assets denominated in currencies other than the account currency, conversions for calculations are carried out at the current spot rate.
If a Spread betting account denominated in GBP trades the US30, which is denominated in USD, all conversions are completed at the current spot rate.
CFD accounts
Assets traded on a CFD account are bought and sold in the currency of the underlying asset, and any profit or loss generated is also calculated in the same currency. However, if an account is denominated in a different currency than the underlying asset, the margin and profit or loss are displayed in the account currency based on the real-time spot conversion rate.
If there are any credits or debits in a currency other than the account currency, they are converted to the account currency at the end of each month. This applies to the cash balance, but not to any unmatched profits or losses, which can only be converted when the position is closed or matched off.
For example, at the end of the month, a client with a GBP account has a cash balance of £3,598 and $5,400. Assuming the closing rate for the month is 1.2541, the $5,400 would be converted to £4,295.60 with a conversion charge of 30 pips (3 x 0.0010). This leaves the cash ledger at £3,598 + £4,295.60 = £7,893.60, plus or minus any unmatched profits or losses, to determine the net account valuation.
| Currency | Parameter |
|---|---|
| AUD | 0.0020 |
| CAD | 0.0020 |
| EUR | 0.0010 |
| JPY | 0.200 |
| NZD | 0.0010 |
| CHF | 0.0010 |
| USD | 0.0010 |
| Below 50,000 USD converted a multiplier of 3 is applied | |
| Above 50,000 USD converted a multiplier of 2 is applied |
Margin
By using margin or leveraged trading, you can open a position by depositing only a small portion of the trade value. This approach has the potential to increase your returns, but it can also magnify your losses as they are calculated based on the entire value of the position.
For instance, when trading indices, the margin rates start at 5%. This means that you only need to deposit 5% of the total value of an asset to open a position. As a result, you can trade with 20x leverage, which corresponds to a leverage ratio of 20:1.
Expiry of Forward contracts
Spread Co closes positions in the current contract using the mid-price and reopens the new position using the mid-price for the next contract month. For positions that exceed the standard size stake of 50, the relevant bid/offer prices at the time of the roll will be used depending on whether a long or short position is held. Spread Co may pass on additional charges incurred from executing in the underlying market.
For example, at the expiry of the US30 MAR contract, any existing position would be rolled over to the next contract, US30 JUN. Any position, whether long or short, in US30 MAR will be closed at the mid-rate of 32501.5 at the expiry time. The rolled position will be opened as a net position in the US30 JUN at the mid rate of 32601.5.
| US30 MAR | ||
|---|---|---|
| BID | MID | OFFER |
| 32500 | 32501.5 | 32503 |
| US30 JUN | ||
| BID | MID | OFFER |
| 32600 | 32601.5 | 32603 |
Dividends
If your Index position is held the day before an ex-dividend event and the end of day cut off time at Spread Co has passed, your position will be adjusted to reflect any equity dividend weighted effect within the index.
Spread Co pays out 100% of the dividend for long positions on UK indices and equities, 85% for long positions on US indices, and 70% for long positions on US equities. For short positions on both UK and US indices & Equities, Spread Co charges 100% of the dividend.
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Payments in & out of accounts
For any charges related to making deposits and withdrawals, please view the our FAQ’s in the support page.
Easy To Open An Account
Reliable Platform
With our platforms you can trade wherever you are – at home, in the office, or when you’re out and about.
0% financing on short index positions
Some companies will charge you to hold a short index position. At Spread Co we won’t.
Powerful Charting
Spread Co charts are powered by TradingView Inc.
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