OVERNIGHT CHARGES

When holding a position overnight, there is a financing cost/benefit. Financing will be on 100% of the value of the closing face value of the share CFD. The charge is based on the current US LIBOR with an 2% additional markup/markdown. Financing charge is factored into the account daily.

If you are long, you pay interest on your position value which is a markup of 2% from the LIBOR.
If you are short, you may receive finance benefit which is a markdown of 2% from the LIBOR

Long trading position

US LIBOR rate is currently at 3.0%. You buy 1,000 shares of Citigroup at $20.00. You intend to keep this position for a night. Assume Citigroup closes at $20.00.

Face value of your trade: $20 x 1,000 = $20,000

Hence you must pay 5.0% (LIBOR + 2%) of the face value ($20,000)

The charge for your position is as follows:

• -5.0% / 360 x $20,000
• = -$2.78

Hence for that day of holding the position, you are charged $2.78 ~ A small charge relative to the CFD face value of $20,000

Short trading position

US LIBOR rate is currently at 3.0%. You sell 1,000 shares of Morgan Stanley at $20.00. You intend to keep this position for a night and hence are subject to financing adjustments. Assume Morgan Stanley closes at $20.00.

Face value of your trade: $20 x 1,000 = $20,000

Hence you will receive 1.0% (LIBOR - 2%) of the face value ($20,000)

The financing for your position is as follows:

• 1.0% / 360 x $20,000
• $0.56

Hence for that day of holding the position, you receive $0.56