Hi I been trading whit T212 for about a year now and sad enough I just noticed my interest charge in multiple company the only 1 I don’t get charge whit is the cryptos I would like to know if I can see my interest before I buy or sell whit a company,stock, mini, indices,ect.
The interest rate on CFDs depends on multiple factors - whether you’re long or short & the type of instrument you’re trading. Cryptos do have almost zero interest if you’re short.
There are three ways you can check the interest rates:
Via the Trading 212 website: https://www.trading212.com/en/Trading-Instruments
I don’t used CFDs but might be good to show expected interest values per day of hding etc, doesn’t have to be accurate.
OP could read about the cost of CFD (if not aware already), I recently started reading in Robert Carvers latest book, leveraged trading.
Thank you and how would I pay the interest? Or does it take it from my profits?
I don’t really understand how the actual interest for a long or short position is calculated from the “swap” number, the value of the instrument and the value in my portfolio. Could you explain the formula that is applied here? It seems kind of crucial to know how much money I will “loose” every night while holding a position open.
Thanks in advance,
Ben (another one, not the OP )
@bsb The word “swap” when looking at stocks is a bit misleading, we’ll change the naming to just interest for simplicity’s sake.
The overnight interest calculations depend on the stock’s currency. In Tesla’s case, it’s USD interbank rate + an additional % set by Trading 212.
I’m afraid I still don’t really understand it completely. In the example above, let’s say that I opened a short position for 1 Tesla stock at $495.83. The USD:GBP rate on the 9th January was 0.76533. How much interest do I pay that night? The “short position swap” value is -0.051594 in your example above. Does that mean I pay $495.83 * 0.76533 * 0.051594? That can’t be, because it’s way too high (£19.58). So is the interest on just the leveraged part? In which case it would be ($495.83/6) * 0.76533 * 0.051594 = £3.26. That’s still too high, from my experience. So, how does the calculation work, exactly?
What you’re seeing as the overnight interest swap is not a percentage, it’s just the nominal value that’ll be charged for trading 1 quantity of the security.
With the TSLA example - if you have 1 BUY quantity, you’ll be charged $0.099749 per night.
If you have 1 SELL quantity, you’ll be charged $0.051594 per night.
If you click on “order details” when placing a trade, you’ll be able to see how much exactly the overnight interest is going to be.