2 days ago the swap fees was increased by a huge amount and it has been done again today. How long will this go on for??
Over the last few days, I’ve been analysing the entire interest history of my account. I have done a detailed analysis of 29 instruments, but Ethereum is the most shocking.
I opened my first Ethereum long position of 12 ETH on 01/05/2020. I was charged £0.81 in interest that evening, so the swap rate must have been approximately -0.81 / 12 = -0.0675. Note that this figure is in GBP, whereas the original figure would’ve been specified in USD. However, I have no way of accessing the original USD figure or the exact exchange rate used.
In the 211 days since I opened my first position until everybody’s crypto positions were closed on 27/11/2020, I’ve held at least one Ethereum position for 174 days. During that time, the swap rate has fluctuated, sometimes down but mostly up, relentlessly carrying the swap rate up to -0.155 on 20/11/2020. That is an increase of 129%. However, on 01/05/2020 the ETH price was about $215 and on 20/11/2020 it was about $510, which is about a 137% increase. The swap rate for all instruments seems to constantly fluctuate proportionately to the instrument price, so perhaps this was to be expected. However, I tend to think of the swap as interest on the amount of money I’ve borrowed for leverage. It therefore doesn’t seem fair that the interest increases just because the value of my investment increases. Do all CFD platforms do this, or is it just Trading 212?
Anyway, this is what happened next:
- On 21/11/2020, the swap rate increased by 22.58% to -0.19
- On 22/11/2020, the swap rate increased by 18.42% to -0.225
- On 23/11/2020, the swap rate increased by 95.56% to -0.44
- On 24/11/2020, the swap rate increased by 187.50% to -1.265
- On 25/11/2020, the swap rate increased by 91.3% to -2.42
- On 26/11/2020, the swap rate decreased by 10.95% to -2.155
- On 27/11/2020, all cryptocurrency positions were closed at 01:00 (in the morning) so there were no more interest charges
The price of ETH did go as high as $608 on 23/11/2020, but that doesn’t remotely explain the 1461% increase (15.6x) over the 5 days from 21/11/2020 to 25/11/2020.
So, when I opened my first Ethereum position I was being charged a swap rate of less than 7p (£0.0675) per ETH. When the swap rate hit its peak on 25/11/2020 I was being charged £2.42. That’s an increase of almost 3500%, which is 36x the original rate.
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And yet no communication from staff as to what is going on here. I don’t understand why all the cloak and dagger.
I cannot wait to close my positions when my targets are hit and go somewhere else.
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Someone has to pay for the fact they can’t hedge their positions … you can work out who that is
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The table below shows my analysis of the 12 long positions I had open during the period where the swap rates were increased dramatically.
Here is some information about my method:
- The “Lowest” and “Highest” values are based on my term of ownership, which is different for each instrument.
- I had to manually figure out the Sell Price and Exchange Rate in order to calculate the APR, so I might not be using the exact figures.
- I can no longer access the price history for Bitcoin or Ethereum, so I just had to use the final sell prices at 01:00 on 27/11/2020, which were $17375.79 and $523.28 respectively. In reality the APR would’ve been higher whenever the actual price was below these levels.
- My APR calculation is based on the amount of money “borrowed” for leverage. For example, if a share was purchased for $500 at 20% leverage, then it cost $100 and the remaining $400 was effectively loaned by Trading 212. However, when Trading 212 increased the leverage on stocks to 50% on 01/12/2020 then the same share suddenly cost $250 and the loan reduced to $250. Despite this, Trading 212 maintained the same swap fees. This explains the increases shown on 01/12/2020 in the table. I’m interested to hear if this is a legitimate way to consider the APR on CFD positions.
| 20/11/2020 | 21/11/2020 | 22/11/2020 | 23/11/2020 | 24/11/2020 | 25/11/2020 | 26/11/2020 | 01/12/2020 | Today | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Lowest | Friday | Saturday | Sunday | Monday | Tuesday | Wednesday | Thursday | Tuesday | Highest | Wednesday | ||||||
| Code | Instrument | Type | Margin | Date | APR | APR | APR | APR | APR | APR | APR | APR | APR | Date | APR | APR |
| AMZN | Amazon | buy | 20% | 10/11/2020 | 12% | 12% | 17% | 18% | 35% | 34% | 56% | 03/12/2020 | 58% | 58% | ||
| AAPL | Apple | buy | 20% | 02/11/2020 | 8% | 9% | 15% | 15% | 35% | 34% | 56% | 15/12/2020 | 58% | 58% | ||
| BTCUSD | Bitcoin | buy | 50% | 30/04/2020 | 15% | 32% | 36% | 41% | 75% | 225% | 445% | 402% | 25/11/2020 | 445% | ||
| DBX | Dropbox | buy | 20% | 01/11/2020 | 10% | 12% | 13% | 14% | 14% | 14% | 22% | 13/12/2020 | 52% | 48% | ||
| ETHUSD | Ethereum | buy | 50% | 10/05/2020 | 11% | 29% | 35% | 42% | 82% | 236% | 453% | 403% | 25/11/2020 | 453% | ||
| FB | buy | 20% | 01/11/2020 | 12% | 12% | 15% | 15% | 35% | 35% | 56% | 07/12/2020 | 58% | 58% | |||
| XAUUSD | Gold | buy | 5% | 30/07/2020 | 4% | 5% | 5% | 8% | 9% | 9% | 9% | 08/12/2020 | 11% | 11% | ||
| MSFT | Microsoft | buy | 20% | 20/09/2020 | 12% | 12% | 16% | 17% | 35% | 35% | 56% | 08/12/2020 | 58% | 58% | ||
| PFE | Pfizer | buy | 20% | 17/11/2020 | 12% | 12% | 17% | 18% | 35% | 35% | 56% | 08/12/2020 | 58% | 58% | ||
| XAGUSD | Silver | buy | 10% | 24/11/2020 | 4% | 4% | 5% | 4% | 4% | 5% | 5% | 13/08/2020 | 4% | 4% | ||
| #ESDEC20 | SPX 500 | buy | 5% | 28/10/2020 | 2% | 2% | 3% | 4% | 4% | 4% | 4% | 08/12/2020 | 5% | 5% | ||
| TSLA | Tesla | buy | 20% | 30/08/2020 | 8% | 10% | 16% | 22% | 41% | 40% | 66% | 08/12/2020 | 68% | 68% |
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Pretty damming when you compare to other brokers in the marketplace.
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Yes I think that’s correct, I’ve also been tracking this for a few positions in instruments I have consistency for…
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Loan amount = closing price of the day converted to GBP (exchange rate that day) * 0.8 (for 1:5 leverage) or 0.5 (for 1:2 leverage) * no of contracts (* day i.e. 3 for weekend)
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Nominal swap interest rate (GBP) / loan amount * 365
Nearly 60% APR!
Merry Christmas eh!
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It looks like we’ve followed the same methodology, except I used 366 days since it’s a leap year! 
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Maybe I am missing something just can’t you use the long position swap rate *365 then divide by the closing price.
I work it out to be APR of around 30%
Neither GBP, number of contracts or leverage should affect the calculation.
???
Nvidia current is 0.42 swap rate which charged for a year is 153 and one contract is worth 533 so it gives me 29% of the current value I pay in interest if I hold one contract.
Sure, that sounds like a quick and sound way from my mental math.
The only problem with your result is we aren’t borrowing the full amount.
With 1:2 leverage we are borrowing 50% so $266.5. Therefore we are paying $159 on $266.5 which is double your % at 57.4%
Before we were paying far less interest for borrowing over twice as much.
The formula I used was necessary when we don’t have access to historic daily swap rates and only the interest value.
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Yep agreed good point on the leverage
I guess the offset is the opportunity cost on the other 50% what else would you do with it. Invest in actual stock but then you potentially half your gains and if you think the stock will rise by more than 3% per month you are still potentially better in CFD depending on how much you can invest.
Either way it’s still so ridiculous the swap I’m rate is super high and hasn’t moved down. The indicie rates have all shot up too.
I guess having a diversified CFD broker pool is the new thing!
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