Capital.com Overnight Financing Fees

Financing fees are an integral part of CFDs, rolling spot foreign exchange and certain spread betting contracts that are not priced in futures (e.g. rolling bets) and are the cost of arbitrage on margin positions。

Traders with long positions pay money fees to brokers to cover their arbitrage costs on the relevant financial instruments, while traders with short positions receive money from settlement gains。The funding fee is only applicable to margin trading where the position is held for more than one business day.。

Capital.When does com implement the change？

Capital.com will implement the new funding rate from march 16 and has emailed customers with a revised detailed schedule the new funding charge will be calculated based on the known premium or discount to the relevant overnight funding rate。

For example, a long position in a US dollar-denominated US equity index CFD would be charged for funding based on the following calculation:

(Position Size * Index Value) * US Secured Overnight Funding Rate (SOFR) + / - 4% For commodities and foreign exchange transactions, Capital.com will refer to the interest rate used in the relevant market。

In foreign exchange trading, this refers to the financing rate of Tomnext or the next day tomorrow; in commodity trading, this refers to the corresponding futures contract。

Change Impact

Capital.com said the new funding rate calculation method will provide more transaction fees and cost transparency for more traders。It will email customers again on March 16 to remind them that the new rates are coming soon.。

The broker will also create a new fees and charges page on its website, which will contain more instances of transactions under the new funding regime.。Capital.com's initiative to clarify its methodology and rates for calculating the cost of funds is welcome。

The overnight swap rate is equivalent to a hidden fee on a trader's account.。Although a premium of + / - 4% sounds high to me, customers can now make an informed choice about whether or not to pay these rates for their overnight trades。