CFD holding costs

If you hold any position after 17:00 New York time, you will be charged a holding cost, or if the position has a fixed expiry the cost is built into the price of the product.

We calculate the holding rate applicable to the holding cost based on the interbank rate of the currency in which the product is denominated. For example, the Australia 200 is based on the Banker Acceptance Bill 1 month rate. For buy positions, we charge 2.5% above this rate. For sell positions you receive this rate less 2.5%, unless the underlying interbank rate is equal to or less than 2.5%, in which case sell positions may incur a holding cost.

Holding costs are calculated as follows:

On a buy position:

(units x opening trade price x holding rate buy) / 365 x CMC Markets currency conversion rate

On a sell position:

(units x -1 x opening trade price x holding rate sell) / 365 x CMC Markets currency conversion rate.

The resulting sum of all holding costs will be credited to or debited from your account as applicable, and will be visible within your account history on the platform.

Shares

Holding rates for share CFDs are based on the underlying interbank rate for the currency of the relevant share (see table below),  plus 2.5% on buy positions and minus 2.5% on sell positions.

Holding costs are charged for buy positions and credited for sell positions, unless the underlying interbank rate is equal to or less than 2.5%, in which case sell positions may incur a holding cost charge and will be deducted from the cash in your account.

Indices

Holding rates for index CFDs are based on the underlying interbank rate of the index (see table below) plus 2.5% on buy positions and minus 2.5% on sell positions.

Holding costs are charged for buy positions and credited for sell positions, unless the underlying interbank rate is equal to or less than 2.5%, in which case sell positions may incur a holding cost charge.

Holding costs for shares & cash indices

CurrencyInterbank rate
AUDBanker acceptance bill 1 month
CADBankers acceptance bill 1 month
CHFLibor 1 month
DKKCopenhagen interbank offered rate 1 month
EUREuribor 1 month
GBPLibor 1 month
HKDHong Kong interbank offered rate 1 month
IDR1 month deposit
JPYLibor 1 month
NOKNorwegian interbank offered rate 1 month
NZDBank bill 1 month
SEKStockholm interbank offered rate 1 month
SGDSingapore interbank offered rate 1 month
USDLibor 1 month

Foreign exchange

Holding rates for FX CFDs are based on the tom-next (tomorrow to next day) rate in the underlying market for the currency pair and are expressed as an annual percentage.

Buy position holding rate = tom-next rate % - 1%
Sell position holding rate = tom-next rate % + 1%

Different rates are quoted for buy and sell positions and are actively traded between banks. Tom-next rates in the underlying market are based on the interest rate differential between the two currencies. As a general rule, if the interest rate of the first named currency is higher than the second named currency in the pair (subject to the 1% adjustment detailed above), and you hold a buy position, the holding cost will be credited to your account. Conversely, if you hold a sell position in this scenario, the holding cost will be debited from your account.

Commodities and treasuries

Holding rates for cash commodity and treasury CFDs are based on the inferred holding costs built into the underlying futures contracts, from which the prices of our cash commodity and treasury products are derived. A cash price is a product without a fixed expiry or settlement date. The price of our cash commodity and treasury products strips out this inferred holding cost (as described above) to create our continuous ‘cash’ price. The inferred daily holding cost is then applied as our holding cost, which can be positive or negative.

Our cash commodities and treasuries provide clients with the convenience of being able to trade on a continuous price that, unlike forward commodities or treasuries, are not subject to an expiration date.

Using the underlying futures price data as a basis, our automated pricing engine calculates theoretical cash prices for each cash commodity and treasury by adding or subtracting (as applicable) the implied holding cost. Using these theoretical cash prices as a basis our automated pricing engine derives price depth ladders containing up to ten levels of depth for each cash commodity and treasury. Each level transparently displays the volume obtainable at a distinct price, with the volume and the applicable spread increasing as you go further down the ladder.

The implied holding cost, plus or minus a haircut, is then applied daily to positions held at 5pm (New York time) as a daily holding cost amount.

The price of our cash product is based on the nearest most liquid futures contract, or primary contract, so over time as the underlying futures approach expiry the primary contract will change, which generally coincides with the roll dates of our forward instruments.

Before each change in the primary contract the implied holding cost rate is calculated, and fixed, measuring the difference between the mid-price of the 'next' primary contract and the mid-price of our current cash price. Each time we update our primary contract the holding cost rate is recalculated to reflect this change.

Simplified calculation used to generate the holding cost rate price for cash commodities and treasuries

  1. Subtract the mid-price of the current cash price from the mid-price of the next primary contract to get the price difference;
  2. Calculate the number of days to expiry between the next primary contract and now;
  3. Divide the price difference by the number of days to expiry and multiply by 365 to get the annualised difference in price terms;
  4. Divide the annualised price difference by the cash price to work out the percentage mid-rate, and;
  5. Bid or long position = (Percentage mid-rate + (maximum of (absolute of the percentage mid-rate x the haircut) or 0.25%)) x -1
    Ask or short position = (Percentage mid-rate – (maximum of (absolute of the percentage mid-rate x the haircut) or 0.25%)) x -1

The haircut used to generate the price for cash commodities and treasuries is the mid-rate +/- 2.5%.

Example (illustrative purposes only)

The UK Crude primary contract moved from June to July on 28 April at approximately 9.30pm (UK time).

  1. ​UK Crude July Future mid-price 47.48 - UK Crude Cash mid-price 47.79 = -0.31
  2. Expiry of July contract 30 May – 28 April = 33 days
  3. -0.31 / 33 x 365 = -3.42879
  4. -3.42879 / 47.79 = -7.175%
  5. Bid or long position = (-7.175% + 2.5%) x -1 = 4.6747%
    Ask or short position = (-7.175% - 2.5%) x -1 = 9.6747%

Forward contracts

A forward contract is a product with a fixed expiration or settlement date, upon which open positions will be settled at the closing price.

Index, FX, commodity and treasury forward contracts are not subject to holding costs.

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