Financing and Charges

  • Q1) What are financing charges?

    Overnight financing charges may be applied to positions that have no set expiry date. As with our low commissions and tight spreads, these charges are  competitive in order to keep your trading costs low. Under normal circumstances, long positions will incur a small charge whilst short positions will be credited overnight financing. For example, on long equity positions, financing is charged at LIBOR +/- 2.5%.

    You are charged overnight financing on the total value of your positions, and competitive rates are applied across all of our markets to ensure financing costs are kept to a minimum. 

    Q2) How do you calculate financing charges?

    Non-FX positions: Daily financing charges or credits are associated with any Daily Funded Trade which is open at our market close. This is calculated using the following formula:

    Short Positions F = V × I / b
    Long Positions F = V × I / b, where:

    • F = Daily Financing Fee
    • V = value of equivalent (quantity x end of day closing price)  
    • I = applicable Financing Rate
    • b = day basis for currency (365 for GBP, HKD and AUD, 360 for all other currencies)

    There may be instances when a Daily Financing Fee is charged to you on short positions, rather than paid to you. This may occur if LIBOR (or RBA IOCR for Australia) is at an exceptionally low rate.

    The daily financing fee will be applied to your account each day that you hold an open position (including weekend days).

    The Financing Rates used are outlined in the table below.

    Country Long Financing Short Financing
    UK  LIBOR + 2.5  LIBOR – 2.5%
    US  LIBOR + 2.5  LIBOR – 2.5%
    EU  LIBOR + 2.5%  LIBOR – 2.5%
    Australia  RBA IOCR + 2.5  RBA IOCR – 2.5%
    Other International    Contact Client Management  

    FX positions: Daily financing for currency Daily Funded Trades (DFTs) is calculated by using one-day interest-rate differentials for the two currencies concerned. We then apply the market rate premium (or discount), together with our overnight charge - which has a minimum or maximum amount.

    Q3) Do you charge commission?

    Sometimes. Spread betting and many of our CFDs are commission free; however equity CFDs are subject to commission charges. These vary by market; for UK and most European equities the charge is 0.1% of the consideration, for most US equities it is 0.15% and for most Asian equities it is 0.2%. Our minimum commission rates are £10, $25 or €25.

    This information is available in the Market Information sheets for each market. You can access these via your trading platform - look for the icon next to the name of the contract in the market search results.

    Q4) Am I charged a commission for opening and closing a CFD trade? 

    Yes: the opening and closing action are effectively two separate trades and you will, therefore, be charged a commission for each action.

    Q5) Why is there a financing charge to hold my positions open when I have already paid a commission?

    CFDs and spread bets are margined products. You only need to deposit a fraction of the overall trade value to open a position. You are effectively ‘borrowing’ the remainder of the deposit and this creates the need for a daily financing charge.

    Q6) Is there a charge for leaving orders? 

    There is no charge for placing Standard Orders. There is, however, a one-off charge when you place Guaranteed Orders (such as Guaranteed Stop Losses) with us. These are charged at the time of placing the order and are non-refundable should you choose to cancel the order.

    Please note: Guaranteed Orders are only available on certain markets and the charges associated with them vary. Please see the relevant Market Information sheet on the Trading Platform for full details: these can be accessed via the icons immediately to the left of the Trade and Order buttons.

    Q7) Will my profits be subject to Capital Gains Tax?

    Spread betting is exempt from UK Capital Gains Tax. CFD trading is not exempt; however any profits or losses may be offset against those from your other investments. Please note that tax laws are subject to change and we recommend that you seek independent investment advice.

    Q8) Will I have to pay Stamp Duty?

    Spread betting is exempt from UK Stamp Duty. CFD trading is also exempt from UK stamp duty unless you are trading Irish stocks. There is a 1% stamp duty charge for these; however this will be refunded if you hold the position for less than 30 days. Please note that tax laws are subject to change and we recommend that you seek independent investment advice.

    Q9) What are dividend adjustments?

    If you have an open position ahead of an upcoming dividend announcement, your account could be impacted by a dividend adjustment.

    CFDs, DFTs and some future contract positions are subject to dividend adjustments which mirror the net dividend payment on the underlying instrument. The dividend adjustment points are given to us by Bloomberg and will be made at the close of business on the day before the ex-dividend date.

    A dividend adjustment has no profit or loss impact. It is credited to long positions and debited from short positions held. You will notice this adjustment on your account and we will also notify you via your statement.

    For more information on dividend adjustments and how they could impact your trading, please contact our Client Management team.

    Q10) How are dividends credited/debited when trading Equity Futures? 

    When trading Equity Futures, your account will be either credited or debited the dividend amount on the day that equities go ex‐dividend. Whether you are debited or credited will depend on whether you are long or short on that specific Equity Futures market. 

    When the underlying Equity Futures market reopens, the price will be at the new market level, minus the dividend - tracking the same price move in the Underlying Instrument. This will be reflected in your open Profit and Loss. 

    However, the impact on your open Profit and Loss (positive and negative) will be countered by the amount credited or debited from your account for the dividends, leaving the net total unchanged as a result.

    Q11) Why have I been charged an inactivity fee?

    Where no activity has occurred on your account for a period of 12 months or more, your account will be deemed inactive. 'Activity' is defined as placing a trade, and/or applying an order on your account, and/or maintaining an open position during this period. A monthly inactivity fee of £25 (or equivalent to your cash balance if less than £25) will be applied for accounts that are inactive for 12 months or more.

    Q12) How does the inactivity fee impact my account?

    The £25 inactivity fee will be deducted on a monthly basis from your cash balance. We will not, however, take your account into negative equity should you lack sufficient funds to cover the fee.

    Q13) What if I do not want to accept the inactivity fee?

    Just start trading - we'd be happy to welcome you back. If you’d like to start trading with us again, please contact our Client Management team who will be able to assist, and answer any questions you may have regarding your account or the inactivity fee.