Foreign currency fee between 1,5% and 10,5% for CFDs or am I missing something?

Yes. That’s correct. I’ve done CFDs on some US stocks too, long and short, and the results all look correct for a 0.5% fx fee.

I just checked my practice account result for a short EUR/USD position which I held overnight and the fx fee is 0,5% (POS697177788).

On my real money account, however, I entered a short EUR/USD position (POS854163272) and sold it on the same day as I bought the one on the practice account and the fee is 3,65%! What is going on?!!

Can please someone from T212 take over at this point and answer to this? And please also expand a little on why you do not offer any forex trades in EUR so this exchange fee would be avoided.

@David @Martin @L.D @JimLahey @Rumen
I would also be grateful about your opinion as CFD expert, @chantal.

Thank you.

As far as I know you only pay the spread. And the swap if held overnight. You don’t pay the swap for a position opened and closed on the same day.

Only thing I can imagine is that this can be caused by having an account in GBP for example. Then you have to take account the EURGBP and GBPUSD rate too. If I trade Gold/USD, then also EUR/USD affects my position. If EUR/USD moves fast I can be in a loss while my position is in profit.

You also pay a currency exchange fee that is separate from spread. It is 0.5% of the result. Eg. I have an account in GBP, I buy a CFD for 100 AAPL and close trade at $1000 loss or profit. My currency exchange fee is 1000 x 0.005/1.3685 GBP, where 1.3685 is the fx rate at moment trade is closed.

The puzzle for @Stojue is how this fee works with currency pair CFDs.

Difficult to calculate. You need all the info when position is opened and closed. Think about the currency rates at those moments, the spread, etc.

Not really. All those things do affect total profit. But here we are talking only about the 0.5% currency conversion fee charged by Trading 212. That depends only on the raw profit in the other currency (difference between opening and closing prices, multiplied by the position size) and exchange rate to home currency at the moment in time the position is closed.

I did a sample today in the practice account with a currency pair that did not include my account currency. The fee was correct.

(1.21728−1.21690)×100000÷1.370×1.005
=27.876

where 1.370 was USDGBP rate at moment of closing.

This makes your results mysterious as I cannot see a way that fee is more than 0.5%.

The only thing could be when you leave a position open for a longer time, the currency difference can be huge. EURUSD and GBPUSD have shown big moves up and down lately. That can affect your positions. Same happens with ISA/Invest.

Thanks for jumping in, @chantal ! In fact, my account is in EUR, so there is no double conversion. And as @Richard.W said, in the case of the EUR/USD pair with an account in EUR, the only information needed is in the trade result as only the exchange rate at the point of closure counts.

Another really bizzare thing is that also in my case the practice account charges the correct fee of 0,5% but not the real money account where it varies strongly (see examples in my entry post)!

I think we have tried every idea and are now stumped until someone knowledgeable from @Team212 helps.

I got a response per email by Georgi Georgiev who I didn’t find in this forum so I cannot tag him:

Please be mindful that the result from your short position POS812589142 with 45 000 EUR/USD is calculated following this formula:

- Quantity x ( Closing price - Opening Price ) / Exchange rate /this exchange rate takes the BUY price for the respective currency pair and already has the 0.5% conversion fee applied to it/ = Result

- 45 000 x ( 1.21378 - 1.21752 ) / 1.258694189 /1.258694189 is the rate with 0.5% fee applied, while the actual BUY price for EUR/USD and current exchange rate at the time of execution was 1.252432028/ = - 45 000 x (- 0.00374) / 1.258694189 = 168.3 / 1.258694189 = 133.71 EUR

With all that laid down, I can confirm that the exchange fee applied to conversion when calculating results from closed CFD positions on our platform is 0.5% and you can also check that here [unclear where “here” is as no link or further document was provided].

My next question therefore is: Why is there a 387 basis points (0,03865 USD) difference between the BUY price which closed the trade and the “actual BUY price for EUR/USD and current exchange rate at the time of execution”?

And why is in the demo account the BUY price the same as the “actual BUY price” (POS697177788, a short order)? And the same for @Richard.W’s trade POS165910153 referenced above (a long order)?

Checking the price on 14.01.2021, the day the order was closed, the highest the price has been was 1.2179 (EUR USD Historical Data - Investing.com).

So I really don’t understand where the “actual” price is coming from…

I am mystified. The 1.258694189 does not look right.

The last time the Euro bought 1.25 USD was in 2018!

Here is a helpful post from April last year in which @Martin once advised about how the fee is calculated.

Perhaps he can help explain why 1.258694189 was used as the USD per EUR rate in calculation of your result. By all our reckoning this is the wrong number, not as it should be, 1.21378 (the buy exchange rate at closing) with a 0.5% adjustment to charge the fee. 1.258694189 is much more than 0.5% greater than 1.21378.

So far as we can tell the method Martin explains was not used, or used with the wrong exchange rate.

This chart taken from the app shows the CFD buy rate around 14 Jan. There is nothing within 0.5% of 1.2587.

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Victor Ts. just sent me an email in response to my question “where the actual BUY price comes from”:

I wish to confirm that Long CFD (Buy) positions are opened according to the buy quote of the price and closed according to the Sell quote of the price.

This implies the following: you have to look for the current Sell quote of the price in order to close your current position on a profit.

Analogically, the short CFD positions are opened according to the Sell quote of the price and closed according to the Buy quote of the price.

Keep in mind that our chart shows the Sell price by default. In order to switch to the Buy price chart, please right-click on the chart>Chart Settings>Buy price chart.

I hope this clarifies the inquiry, nevertheless, we remain at your disposal shall further questions arise.

Which does, in fact, not clarify anything.

It is incredibly sad that the customer service has not been able to respond to this in any competent manner: after 4 emails and 35 replies to this post! What else is there I can do that T212 looks into this properly?! @Team212

The “actual” exchange rate of all my forex trades is artificially elevated and has nothing to do with the exchange rate at the time of closure of the position.

It is very disappointing that these customer service replies completely miss the point you are querying. The one above looks to be a canned answer that has been copy-pasted to you without the agent actually understanding your question.

How are you asking them the question out of curiosity, I have to admit even from the start of the thread I was confused by the question.

@Dougal1984 has a good point. You could try to frame your question in a very skilful way. Perhaps we can help.

Something like: I opened a short trade on EURUSD at a quantity Q at sell price $X and closed it at buy price $Y, at a profit since Y<X. If there were no fee for fx I would expect to obtain.

Q (X - Y)/Y euros

I appreciate that with the fee, the Y is increased by 0.5% and I expect to get the lesser amount of

Q (X-Y)/(1.005 Y) euros

However, what I have actually received is less than this. It is as if I have received

Q (Y-X)/(1.005 Z) euros

where Z is significantly greater that Y.

In my trade Q=45000, X= 1,21752. Y=1,21378.

Q (X-Y)/(1.005 Y) = , but I received only 133,71.

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To the response of Georgi Georgiev, which I posted in post 30 of this thread, I replied:

In fact, I have compared this result with the demo account and another user’s result. There, the closing price is always the exchange rate.

Please explain therefore: Why is there a 387 basis points (0,03865 USD) difference between the BUY price which closed the trade and the “actual BUY price for EUR/USD and current exchange rate at the time of execution”?

And why is in the demo account the BUY price also the “actual BUY price” (POS697177788, a short position)? And the same for POS165910153, a long position from another user?

I am not sure how to respond to it differently and how to be more clear… They would have to open the positions I referenced and do some basic calculations. Which takes 1 minute (if they know how to do it), but this is not what they are willing to do…

If you have any suggestion of how else to formulate it, I would be very happy for your help :smiley: