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), rollover costs 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.
Forex trades held open past the end of the trading 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 forex spread bets are based on the tom-next (tomorrow
to next day) rate in the underlying market for the currency pair, plus
1% on buy positions or minus 1% on sell positions. Holding rates are expressed
as an annual percentage and can be found in the ‘Product Overview’ for
each instrument on the platform.
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.
You’re also able to roll forward positions over to keep a trade open beyond
its expiry date. When you roll a forward position to the next contract,
your profit or loss is realised and you enter the new trade at the mid-price,
saving 50% on the spread cost.