Financing and Charges

Q1) What are financing charges?

Overnight financing charges may be applied to positions that have no set expiry. As with our low commissions and tight spreads, these charges are kept competitive 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 would only have to pay financing on the percentage of the trade that is not covered by margin. For example, if our margin is 10% on a particular market, you would only have to pay financing on the remaining 90%. Similarly competitive rates are applied across all markets.

Q2) How do you calculate financing charges?

Non-FX positions: Daily financing charges or credits are associated with any rolling bet position 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 = 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.

FX positions:Daily financing for rolling currency bets 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 will have a minimum or maximum amount.

Q3) Do you charge commission?

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 £15, $25 or €25.

This information is available in the Market Information sheets for each market. You can access these via the Trading Platform, the icon for which is placed immediately to the right of the Trade and Order buttons.

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

Yes the opening and closing action is 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 gives rise to 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 with us. These are charged at the time of placing the order and are non-refundable if you choose to cancel the order.

These are only available on certain markets and the charges vary between them. 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.

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.

Q9) What are dividend adjustments?

CFDs, like the underlying stocks, are subject to corporate actions including dividend adjustments. Our equity and index markets may be subject to a dividend adjustment for positions held at the close of business on the day before an ex-dividend date.

This is to reflect the fact that the underlying market will (everything else being equal) open at a lower level on this date as the market goes ex-dividend. A dividend adjustment is credited to long CFD positions and debited from short CFD positions.