Thoughts on CFD swap

Just wondering if anyone has opinions on why the CFD swap charges are so high?

Comparing to the other big CFD brokers in the market the swap charge on 100k is around 45k more than other providers.

Your figures are obviously incorrect and need looking at again as 45% isn’t right obviously.

There are a lot of issues surrounding the cfd service currently, you only need to type cfd into the search bar to find many open active threads about it.

I believe t212 along with other brokers have mis judged the market recovery and are now trying to recover losses. This is ofcourse just my opinion but this is how a view it as a business owner myself

Hi correct It’s a very crude way of multiplying the long position by the value of the cfd to give a view on the interest charge.

Actually only half of the money is borrowed so the interest should in theory be closer to double maybe 86% on us stock holdings. What do you work the interest out to be?

I use us stocks as the margin requirement is the same for retail and professional clients while indexes and forex still has beneficial margin for professional individuals.

Principle still stays the same. You open a cfd on US stocks for 100k and your interest/swap charge is around 45k unless you see different?

Are you referring to the overnight interest charges or the margin requirement?

Technically it’s a long swap charge annualised at today’s rate for clarity.

Technically the value of the charge is less for professional individuals as the margin requirement is less. Therefore you borrow more but pay the same swap. Effectively borrowing more money at the same fixed rate as the retail user therefore lowering the percentage of the charge if it was to be looked at as an APR charge.

Annually yes, they are not allowing you to hold trades for long periods as they will close your account down. The overall charges are stacked against you, in my opinion you would have to have a perfect strategy to make any money at the moment through cfds

Which is interesting as when I started trading the swap fee was 2% on indexes and 4% on stocks. This is also consistent with my other accounts but I would have expected all of my swaps with brokers to have gone up but it’s just this one that rises weekly.

You said above that the c46% was clearly wrong can you explain?

Because your confusing an overnight interest charges or swap rate with an annualised interest charge. Its not 45% interest overnight

Margin charges are always referred to annually.

But charged over night, so your under 1% per week
2 to 3% overnight is pretty standard, cfd trades are supposed to be short term the overnight element just stops you from being forced to sell at a loss ie gives you another shot

Who charges that rate in the market?

Can your rephrase? Do you mean which companies charge that rate or who is receiving the interest?

Which companies charge that rate?

IBKR is at 1.5% annually on 200k EUR loan in their example.

That’s including the divided deduction and without adding the number of days you’ve borrowed for.
It’s not charging you 45% interest overall.
You can’t borrow leverage on a 200k trade and only pay 1.5% annually for a position open for 12 months.

You have said margin charge which is the amount you have to have in cash to remain solvent and then your switching to an overnight swap/interest rate

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We digress, I’m still failing to understanding why the CFD swap rates are higher on this platform compared to IBKR for example.

I changed the above and I think you are referring to free margin that is required.

I do agree t212 have raised there charges but they can’t be charging 45k on 100k, you need to have a look on the other cfd threads as there’s many Informative people on here that trade cfds a lot more than I do.
Right now I think it’s risky business and designed for even good traders to lose

Been trading CFDs for nearly 5 years and have contributed to the other threads.

Swap calculator is as follows for BABA

-0.269044 Overnight charge
231.7 value of stock

Overnight charge * 365 = 98.2

98.2 / 231 = 42.5%

Charge of opening the CFD but not including the fact I put in 50% capital assuming it’s all borrowed.

So why can’t they be charging it? What’s wrong with the math?

Are you calculating the borrowed leverage? The stock buy price is not what your borrowing it’s what your buying

It’s entirely dynamic though. Do another stock and you won’t get 42.5%

I didn’t think you could go long on alibaba at the moment so this may be where the high rates for conversion are coming in.
I don’t really trade cfds and when I do I rarely hold overnight. 45% is not right for an actually available trade