CFD Long Positions Swap - Interest

It’s actually updated by the minute.

I tracked Tesla’s long interest fee vs Tesla’s stock price for about an hour. It mirrors it exactly. So basically if you have a few long CFDs in Tesla and the share price goes up, so does your interest fee.

Not a surprise though after the shenanigans last week.

At least we have an idea of how it works now.

This is between 8pm to 9pm this eve:

3 Likes

I guess it makes sense if you consider interest as a cost of borrowing money. ‘To borrow X amount we will charge you Y’. Although it is a bit shitty that it changes after you’ve already borrowed the money. In that case its like ‘ok, we will lend you this money for X dollars. WAIT you’re doing well?? We want more money then!!’. Which in essence is saying ‘you take on the risk, we will take the proportional benefits to how well you do’.

Borrow $50,00 from the bank to buy a car.

Somehow the car increases in value. Maybe it becomes a hipster icon. The bank demands another $5,000 off you.

Something like that.

You could argue a variable interest rate is a good thing too though in fairness. With mortgages, if there is suddenly a housing crash and your house is worth a fraction of what you bought it for, interest payments will reflect that.

You always see ads on television for insurance and mortgages - ‘with monthly repayments with variable APR’. So not all bad.

But still shitty its not obvious that the interest rises when you’re doing well.

Nice work. Did you figure out the relationship between the two values?

Is it as simple as the swap being a (variable) percentage of the price? If it is, do you think they use the buy or sell price for long positions? Profits on long positions are determined by the sell price, so that would be my guess.

Also, am I right in saying that the fluctuations during the day are completely irrelevant and all that matters is what’s happening at 22:00?

I don’t have the raw price data, just the swap fees. Extracting the price data is a whole 'nother kettle of fish. But it could be a variable percentage of the price. Currently Tesla’s long swap (-0.555374) is 0.09% of the buy price ($597.63). I guess there’s a dial that turns the % up and down. Is it set at 0.09% for the next week or few weeks or does it fluxuate? Who knows.

And you’re right that the only swap fee that matters is the one at 22:00.

Just wanted to get an advice. I’ve got 50 quantities of TESLA been holding them for long now. I remember when all 50 would cost me £20 per day now I pay £44.50 a day so in order for me to keep up my positions open it cost me £1,379.50 a month that’s £16,554 a year in current rate of -0.868404 that’s almost double in less than a month.

Is this normal? I understand this is to do with hedging becoming expensive but how much up would this rate go, it’s going up every single day and Im just worried that oneday it will cost me £200 a day to keep these positions open …

See my swap interest analysis (which includes Tesla) here:

I’ve closed most of my positions since then so I’ve stopped tracking it.

I closed all my positions in CFD for this very reason although they were not TESLA but still, the fees far outweighed the risk so just wasn’t worth it