If you carry a Share CFD position overnight, it will incur a financing cost or benefit. Finance will be on 100% of the value your exposure in the market. If you are long, you may have to pay interest to CMC Markets; if you are short, you may receive interest from CMC Markets.
How to calculate the finance rate using a Share CFD example
Long trading position
You wish to buy 2000 Share CFDs at $5.00 and decide to hold the position overnight.
- 2000 x $5.00 = A$10,000.00 – this is the value of your position.
You are then charged interest at the official overnight cash rate +2.0% - A highly competitive premium for a leveraged product.
This is then multiplied by your total market exposure, and then divided by 365 days in the year to give your daily overnight rate.
| 5.50%* + 2.0% = 7.50% A$10,000 x 7.50% = A$750 A$750/365 = A$2.05 |
- A$2.05 will be debited from your trading account for every night you hold this position.
Short trading position
You wish to sell 2000 Share CFDs at $5.00 and decide to hold the position overnight.
- 2000 x $5.00 = A$10,000.00 – this is the value of you position.
You are then credited an amount calculated by using the official overnight cash rate less 2.0% - a typical adjustment for a leveraged product.
This is then multiplied by your total market exposure, and then divided by 365 days in the year to determine the daily overnight rate paid to you.
| 5.50%* - 2.0% = 3.50% A$10,000 x 3.50% = A$350 $350/365 = A$0.95 |
- A$0.95 will be credited from your trading account for every night you hold this position.
* Rates based on the official overnight cash rate. This rate is subject to daily market fluctuations.
