What are the costs involved in spread betting and CFD trading?
There are a number of costs to consider when spread betting, including spread costs, holding costs (for trades held overnight – this is essentially a fee for the funds we ‘lend you’ to cover the leveraged portion of the trade) and guaranteed stop-loss order charges (if you use this risk-management tool).
The spread is the key cost involved in spread betting, and is the difference between the buy and sell price of an instrument. The narrower the spread, the better value you receive, because the market only has to move slightly in your favour to offer the possibility of a profit on your spread bet.
Share trades held open past the end of the day (5pm, New York time) are subject to holding costs, which can be positive or negative depending on your trade direction and the applicable holding rate. Holding costs for shares are based on the underlying interbank rate for the instrument, plus 0.0082% on buy positions or minus 0.0082% on sell positions.
You can add a guaranteed stop-loss order (GSLO) to your trade, which guarantees to close you out at your specified level, regardless of market volatility or gapping. A cost is applied for using a GSLO, but if it's not triggered we'll refund 100% of the original GSLO charge. The charge, or ‘premium’, is calculated by multiplying the premium rate by the bet size. Learn more >