Overnight funding

Same mechanic as swap, different plumbing, and a bill that is often built differently. ### How a CFD broker prices it On share and index CFDs the charge is usually assembled from a benchmark overnight interest rate plus the broker's own admin fee, then divided down to a daily figure. Capital.com spells out the components on its fees page: the relevant interest rate benchmark (SONIA for sterling-denominated underlyings, SOFR for dollar-denominated ones) plus or minus a daily admin fee of 0.01096%. Their own worked example runs a long position of 50 Tesla shares at $195, which is $9,750 of exposure, at about $2.31 a night, totalling $64.68 over 28 days. That is the shape of the thing. Trivial nightly. Ugly monthly. ### The part traders skip The markup is not standardised, and it is where the real difference lives. Good Money Guide's comparison of CFD overnight financing shows brokers charging anywhere from around 1.5% over the benchmark at the cheap end to several times that at the expensive end. Same position, same holding period, materially different cost, purely because of where the account is. Two more things people get wrong: - It is charged on your **exposure**, not your margin. The financing follows the full notional, which is precisely why it feels out of proportion to the cash you committed. - Long usually pays and short *may* receive, but that is not a rule. Whether a short is credited depends on the benchmark level and the size of the broker's markup. Check whether your broker pays out on shorts at all. ### Why it decides trade plans A cost that only accrues with time is invisible to one kind of trader and structural to another. Flat by the New York close and it never touches you. Holding for weeks and it is a line item that belongs in the expected cost of the trade *before* you enter, alongside spread and commission, not a surprise you discover in the statement.