CFD Holding Costs

Also known as overnight financing, ‘holding costs’ are the fees applied to CFD positions held overnight or longer. This fee is factored into the cost of trading CFDs because they exceed the parameters of a ‘short position’, meaning they constitute an investment for which your broker has lent you money. For short positions however, you’ll receive interest on your investment. The cost of overnight financing is calculated fairly minimal, but if you’re holding trades for an average of 35 days or more, these costs can rack up so it’s worth checking the fees you’re paying to ensure your profits stay your own.

Other costs to be aware of

One of the main benefits of CFD trading is the the minimal costs incurred, both as a result of the exemption from stamp duty and income taxes and fractional broker fees. Because of this, trading CFDs has soared in popularity with experienced traders, providing a cost-effective alternative to regular Forex trading through ECN brokers. With this being the case, it’s worth noting that profits from CFD trading in the UK are subject to capital gains tax (CGT), in the event of gains exceeding the annual exemption limit of £10,100.  

The popularity of CFD trading is highest among experienced traders, and perhaps rightly so, because the potential risks are far higher than standard Forex trading because they are a high leverage derivative product, and so whilst traders stand to make strong profits, losses can also be magnified.

  • BrokerEUR/USD
    SpreadEX 0.6pips (variable) margin: 3.33%
    InterTrader 0.6pips (fixed) margin: 3.33%
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