DeltaStock - Global Forex and CFD Broker

Open a Live Account
Open a FREE Demo Account
Инвестиционен посредник в България с най-висок рейтинг за 2017 г.
Инвестиционен посредник в България с най-висок рейтинг за 2017 г.
Lesson

Interest accrual in trading CFDs on margin

When you are holding an open position in CFDs on Shares, Indices, ETFs or Cryptocurrencies at the end of the business day (24:00 EET), interest is charged to your account (or received) since you are trading on margin – i.e. you borrow money from your broker in order to have to open and maintain that position.

Note: When trading CFDs on 100% margin (Cash CFDs), interest is neither charged nor received!

The interest rate determining the daily interest you will pay or receive for holding an open position is equal to:

  • the prime interest rate for the currency in which the CFD’s underlying asset is traded;
  • the amount of the increment (with a positive or negative sign) over the prime interest rate: depends on whether your position is long or short.

Note: The interest rate may be a positive or a negative number. The amount of interest accrued is calculated based on the entire value of the position (number of CFDs x closing price) at 24:00 EET. Detailed information can be found in the Tariff of Interest Rates, Fees and Commissions of Deltastock.

Daily interest is calculated using the following formula:

Daily Interest = Number of CFDs1 × Closing price × Interest rate
360 days (or 365)

1 When calculating the interest, the number of CFDs corresponding to the position at the end of the business day is used.

If you are holding a long position, interest will be withheld from your account.

If you are holding a short position, interest will be paid to you if the interest rate on your position is a positive number. Interest will be withheld if the interest rate on your position is a negative number.

The calculated sum is in the currency of the traded instrument. If your account is in another currency, then the interest amount will be recalculated in the currency of the account – the corresponding closing price for the currency pair is used.

Examples:

Please be advised that prices and interest rates displayed below are for reference purposes only and do not reflect the current market situation.

1) You are holding a LONG position in Apple (AAPL) shares:

a) Your position is 10 CFDs

b) Closing price is 190.00 USD

c) 2.0% Fed (US Federal Reserve) funds rate plus 3.0% increment for long positions in US shares equals to 5.0% interest rate on the position

Daily Interest = 10 CFDs × 190 USD × 5% = 0.26 USD
360

The interest, in the amount of 0.26 USD, will be withheld from your account.

2) You are holding a LONG position in the miniAUSTRALIA200 index:

a) Your position is 10 CFDs

b) Closing price is: 620.00 AUD

c) 1.5% Reserve Bank of Australia (RBA) cash rate plus 3.0% increment for long positions in Australian indices equals to 4.5% interest on the position

Daily Interest = 10 CFDs × 620 AUD × 4.5% = 0.78 AUD
360

The interest, in the amount of 0.78 AUD, will be withheld from your account.

3) You are holding a SHORT position in Apple (AAPL) shares:

a) Your position is -10 CFDs

b) Closing price is 190.00 USD

c) 2.0% Fed funds rate minus 3.0% increment for short positions in US shares equals to -1.0% interest rate on the position

Daily Interest = -10 CFDs × 190 USD × -1% = 0.05 USD
360

The interest, in the amount of 0.05 USD, will be withheld from your account.

4) You are holding a SHORT position in Ether USD (ETH/USD):

a) Your starting position is -10 CFDs

b) Closing price is 430.00 USD

c) 2.0% Fed funds rate plus 3.5% increment for short positions in Cryptocurrencies equals to 5.5% interest rate on the position

Daily Interest = -10 CFDs × 430 USD × 5.5% = -0.66 USD
360

The interest, in the amount of 0.66 USD, will be added to your account.


Note: Views expressed here are for education purposes only and are not the views of Deltastock or its employees. These views are not personal recommendations or investment advice. Any quotes of financial instruments displayed on this page are for reference purposes only and do not reflect the current market situation. You may wish to seek independent advice before entering into transactions.