Calculate Your CFD Finance Charges

Submitted by Share Trading on 11 February, 2010 - 13:01

How to calculate your finance charges in cfd trading

You are liable for finance charges when you trade CFDs are you are fundamentally borrowing money. However, there is no interest charge on positions which you close on the same day you enter the trade. Interest will be charged or credited if you hold a position overnight. The finance charges are typically based on the Reserve Bank of Australia (RBA) rate plus or minus a margin of about 2 to 3 percent. So if you are holding a CFD for an Australian stock, you will pay interest when you hold a long position. If you are short on that CFD of an Australian stock, then your account will be credited with the RBA interest minus your CFD provider’s margin.