Financing fee – what’s the cost of using a Multiplier?
When you use a Multiplier and keep a position open overnight, you are charged a financing fee. This amount is charged daily at 23:00 GMT. For transparency, the financing fee is clearly shown in the details screen of each product.
Do I pay a financing fee even if I’m not using a Multiplier?
If you are not using a Multiplier, you do not pay a financing fee. In the past, prior to 3rd February 2019, we used to charge a financing fee for some products (cryptocurrencies, for example) even if no Multiplier was used. That is not the case anymore.
Do I pay a financing fee on every product on the app?
We do not apply financing fees to US Oil futures. For all other products, the following rules apply.
How is the financing fee calculated?
The financing fee is a percentage of the total trade size. Its calculation varies between products (cryptos and non-cryptos) and trade direction (long and short).
All products, except cryptocurrencies
For all products except cryptocurrencies, the financing fee percentage is based on the relevant interbank rate (EONIA for European products, LIBOR USD for US products), which is added or subtracted to a fixed 2.5% annual spread.
To long positions, the following formula is applied:
financing fee = (current total value of the trade) * (local interbank rate + 2.5%) * (1 / days per year)
To short positions, this formula is applied instead:
financing fee = - (current total value of the trade) * (local interbank rate – 2.5%) * (1 / days per year)
We count 360 days per year for products denominated in EUR and USD, and 365 for products denominated in GBP. As said, the financing fee is only charged when you use a Multiplier.
As to cryptocurrencies, on short positions we do not apply any financing fee.
To long positions instead, we apply a fixed rate: 20% per annum on Bitcoin and 25% per annum on other coins.
Therefore, the formulas to calculate financing fees on long positions over crypto assets will be:
financing fee = (current total value of the trade) * (20% / days per year)
for Other coins:
financing fee = (current total value of the trade) * (25% / days per year)
As said, the financing fee is only charged when you use a Multiplier. For positions without a Multiplier we do not charge a financing fee.
Can you give an example of a financing fee calculation?
Let’s say you invest € 100 with a x5 Multiplier in a long position over a CFD on a European stock. Until the position is open, each day following the trade, at 23:00, you will be charged a daily fee equal to the applicable daily rate multiplied by the total value of the trade, i.e.: € 500. The applicable daily rate in turn will be equal to the sum of the EONIA rate of that day and the annual 2.5% spread, divided by 360. Assuming the Eonia rate of that day is -0.371%, the formula will look like this:
financing fee = (€ 500) * (-0.371% + 2.5%) * (1 / 360)
Which means the daily financing fee you will pay will be equal to € 0.03.
Other questions? You can always reach out to us via chat or writing to firstname.lastname@example.org.