Financing and Charges

  • Q1) What are financing charges?

    Overnight financing charges may be applied to positions that have no set expiry. As with our low commissions and tight spreads, these charges are kept competitive to keep your trading costs low. Under normal circumstances, long positions will incur a small charge whilst short positions will be credited overnight financing. For example, on long equity positions, financing is charged at LIBOR +/- 2.5%.

    Q2) How do you calculate financing charges?

    Non-FX positions: Daily financing charges or credits are associated with any position which is open at our market close. This is calculated using the following formula:

    F = V x i / b, where:

    • F= daily financing charge.
    • V = value of equivalent holding of the underlying financial instrument. 
    • i = applicable financing rate.
    • b = day basis for currency (365 for GBP and AUD, 365 for all other currencies).

    Your account will be debited a financing amount for each long position that you hold, and should be credited a financing amount for each short position that you hold. Please note that if a short position's calculation produces a figure below zero (i.e LIBOR is at a lower rate than that of our charge), this figure will be debited.

    The financing rates used are:

    Country Long Financing Short Financing
    Australia 2.5% over Reuters Deposit Rate 2.5% under Reuters Deposit Rate
    UK 2.5% over LIBOR 2.5% under LIBOR
    US 2.5% over LIBOR 2.5% under LIBOR
    EU 2.5% over LIBOR 2.5% under LIBOR

    FX positions: Daily financing is calculated by using one-day interest-rate differentials for the two currencies concerned. We then apply the market rate premium or discount, together with our overnight charge, which will have a minimum or maximum amount.

    Q3) Do you charge commission?

    Many of our CFDs are commission free; however equity CFDs are subject to commission charges. These vary by market; for UK and most European equities the charge is 0.1% of the consideration, for most US equities it is 0.02% and for most Asian equities it is 0.2%. Our minimum commission rates are £10, $15, AUD5 or €10.

    You can access these via the Trading Platform, the icon for which is placed immediately to the right of the Trade and Order buttons.

    Q4) Do I get charged a commission for opening and closing a CFD trade? 

    Yes the opening and closing action is effectively two separate trades and you will, therefore, be charged a commission for each action.

    Q5) Why is there a financing charge to hold my positions open when I have already paid a commission?

    CFDs are margined products. You only need to deposit a fraction of the overall trade value to open a position. You are effectively ‘borrowing’ the remainder of the deposit and this gives rise to the need for a daily financing charge.

    Q6) Is there a charge for leaving orders? 

    There is no charge for placing Standard Orders. There is, however, a one-off charge when you place Guaranteed Orders with us. These are charged at the time of placing the order and are non-refundable if you choose to cancel the order.

    These are only available on certain markets and the charges vary between them. Please see the relevant Market Information sheet on the Trading Platform for full details, these can be accessed via the icons immediately to the left of the Trade and Order buttons.

    Q7) What are dividend adjustments?

    CFDs, like the underlying stocks, are subject to corporate actions including dividend adjustments. Our equity and index markets may be subject to a dividend adjustment for positions held at the close of business on the day before an ex-dividend date.

    This is to reflect the fact that the underlying market will (everything else being equal) open at a lower level on this date as the market goes ex-dividend. A dividend adjustment is credited to long CFD positions and debited from short CFD positions.

    Q8) Is there a charge for funding by credit card?

    City Index does not charge any fees for credit card deposits.  However, if you deposit funds from abroad, you may be charged a cross-border fee or currency conversion fee by your issuing bank

    Q9) Is there a fee for withdrawing funds?

    City Index does not charge you for withdrawing funds via BPAY credit card, debit card or EFT wire. There is a charge of AUD$25 for international wire transfers.

    Q10) Why have I been charged an inactivity fee?

    Where no activity has occurred on your account for a period of 12 months or more, your account will be deemed inactive. Activity is defined as placing a trade and/or applying an order on your account or maintaining an open position during this period. A monthly inactivity fee of AUD$25 (or equivalent to your cash balance if less than AUD$25) will be applied for accounts that are inactive for 12 months or more.

    Q11) How will an inactivity fee impact my account?

    The AUD25 inactivity fee will be deducted on a monthly basis from your cash balance. We will not, however, take your account in to negative equity should you not have sufficient funds to cover the fee.

    Q12) What if I do not want to accept the inactivity fee?

    We would be happy to welcome you back. If you’d like to start trading with us again, please contact our Client Management team who will be able to assist with any questions you may have regarding your account or the inactivity fee.