Spread Betting and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.3% 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
Low Financing Charges
We offer 0% financing on short index positions
Some companies will charge you to hold a short index position.
At Spread Co we won’t.
When you go short with a spread bet or CFD on an index position overnight, you won’t pay a penny more with Spread Co. Financing costs for futures contracts are already built into the quoted price, and for all other products, we try to keep our charges as competitive as possible.
What are financing charges?
When you open a spread bet or CFD trade you’re effectively borrowing all the funds to make the trade or bet. When you hold a position overnight, you have to pay a financing fee. This appears as ‘Overnight Financing’ on your account.
The fee is effectively interest on the amount borrowed and is based on the type and value of your position.
How we calculate overnight financing
Our financing charge for long index positions, conducted in GBP, is SONIA +/-2%, a competitively low rate.
If you conducted the trade or bet in USD or EUR, then US SOFR or ESTR is used, respectively.
Rates are based on Alternative Reference Rates (ARRs) in the native currency of the asset or account for Spread Betting.
For long index positions held overnight we make an adjustment to your account.
This is at a rate of 2% plus the interbank rate for the currency of the trade. The formula for calculating the finance charge is:
Note: Days in the financial year is 365 for UK100 and UK equities, and 360 for all others.
Finance charges for Forex and spot metal trades held overnight are based on tom-next (tomorrow to next day) rates for the currencies concerned, or the currency the metal is traded in, as opposed to using an interbank rate.
Tom-next rates vary and different rates are used for long and short positions. For example the rate for shorts could be -1.11% while the rate for longs might be -0.11%.
Spread Betting Overnight Funding Charges Examples
Examples of market environment where the Base Interest Rates exceed the overnight financing haircut rate
| Market | UK100 | US30 | Barclays | Apple |
|---|---|---|---|---|
| Position | 10 | 2 | 10 | 1 |
| Closing Price | 7450 | 34256.7 | 159.82 | 151.1 |
| Overnight Rate | 3.112% | 4.368% | 3.112% | 4.368% |
| Haircut | 2.0% | 2.0% | 2.0% | 2.0% |
| Long Overnight Rate | 5.112% | 6.368% | 5.112% | 6.368% |
| Short Overnight Rate | 1.112% | 2.368% | 1.112% | 2.368% |
| Position Value | 74500 | 68513.40 | 1598.20 | 15110.0 |
| Long Position Charge | -10.43 | -11.95 | -0.22 | -2.64 |
| Short Position Paid | 2.27 | 3.51 | 0.05 | 0.98 |
Where the overnight currency rate exceeds Spread Co Financing Haircut, overnight lending interest is paid on the position
Market environment examples where the Base Interest rates are lower than overnight financing haircut rate. Where short positions interest rate does not exceed Spread Co haircut, no charges are applicable for short positions on cash equity & index positions
| Market | UK100 | US30 | Barclays | Apple |
|---|---|---|---|---|
| Position | 10 | 2 | 10 | 1 |
| Closing Price | 7450 | 34256.7 | 159.82 | 151.1 |
| Overnight Rate | 1.112% | 1.368% | 1.112% | 1.368% |
| Haircut | 2.0% | 2.0% | 2.0% | 2.0% |
| Long Overnight Rate | 3.112% | 3.368% | 3.112% | 3.368% |
| Short Overnight Rate | -0.888% | -0.632% | -0.888% | -0.632% |
| Position Value | 74500 | 68513.40 | 1598.20 | 15110.0 |
| Long Position Charge | -6.35 | -6.32 | -0.14 | -1.39 |
| Short Position Paid* | 0.00 | 0.00 | 0.00 | 0.00 |
*The short overnight rate is negative, in which case the position receives no interest and is NOT charged any interest
For more information about Overnight charges
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0% financing on short index positions
Some companies will charge you to hold a short index position. At Spread Co we won’t.
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