What is Overnight Funding?
If you hold a short-term trade and want to keep it open overnight, you'll be charged a daily interest fee. This charge will be applied to cash CFD positions held through 2200hrs UKT (0500hrs SGT) - 2200hrs UKT (0500hrs SGT).
Please note that actual trading times are governed by local time in the country of the index's origin. Consequently, seasonal adjustments (such as daylight saving) in either the UK or the country of origin may cause times shown to be imprecise.
Why is overnight funding charged?
When trading CFDs, you're using leverage. This means you are effectively being lent the money required to open your position; outside the initial deposit you've paid. To keep your position open after 2200hrs UKT (0500hrs SGT), an interest adjustment will be made to your account to reflect the cost of funding your position overnight.
How can I see what I've been charged?
A statement which contains all trades and associated charges can be generated by navigating to "Profile" icon illustrated on the top-right corner with your initials > Click into "Documents" > "Transaction Statements" and select a custom date range.
How is overnight funding calculated for each market?
Indices
Indices
For each day that a cash CFD position is open on a stock index, adjustments are calculated to reflect the effect of interest and dividends (if applicable).
Cost currency is determined by the currency of the underlying asset for CFDs.
ARR is calculated according to the currency of the underlying instrument.
IG publishes weekly interest rates used to calculate the overnight funding rates (per annum) for Indices. You can find them here
Please note that open positions held through 2200hrs UKT (0500hrs SGT) on Fridays will be adjusted for three days’ worth of funding to cover the weekend.
Formula:
Number of contracts x value per contract x price x (3% admin fee +/- adjusted ARR) ÷ 365
Price = price at 2200hrs UKT (0500hrs SGT) + if long – if short
365-day divisor used for the FTSE 100 and other GBP and SGD denominated markets.
360-day divisor used for all other markets
Example:
You’re short two contracts on the US Tech 100
The contract value is $1
The 0500hrs (SGT time) price is 6957
The 1-month SOFR rate* is 1.53%
Cost = 2 x $1 x 6957 x (3% - 1.53%) ÷ 360
= $13,914x 1.47% ÷ 360 = $0.5682 overnight charge
*We use SOFR and the 360-day divisor since you're trading the US index in USD
Forex
Forex
FX and spot metals funding
A tom-next rather than an interbank rate is used in the calculation of funding costs for forex and spot metals.
Tom-next is the day's market swap rate for that pair or metal.
Formula:
Number of contracts x value of contract x offer/bid swap rate
There are three steps to this formula:
1.Value = Price in points x 0.8% (mini) ÷ 360
2. Swap rate:
When going short: Tom-next rate – value
When going long: Tom-next rate + value
3. Cost = Number of contracts x value of contract x swap rate
Example
You’re short one EUR/USD mini lot
The contract value is $10
The tom-next rate is 0.34 bid/0.39 offer
The closing spot price is 1.0650
Value = 10650 x 0.8% ÷ 360 = 0.24
Swap rate = 0.34 – 0.24 = 0.10
Cost = 1 x $10 x 0.10 = $1.00 credit*
*This is a credit since the bid interest rate is lower than the offer rate and you are holding a short position.
Commodities
Commodities
Please note that open positions held through 2200hrs UKT (0500hrs SGT) on Fridays will be adjusted for three days' worth of funding to cover the weekend.
Formula (three steps):
Basis (the daily movement along the futures curve): (P3 – P2) ÷ (T2 – T1) T1 = expiry date of the previous front future T2 = expiry date of the front future P2 = price of front future P3 = price of next future
IG charge: Price x 3% ÷ 360
Adjustment: Bet size x (basis + IG charge)
Example:
You're short one SD 1 contract on Oil – US Crude.
T2 – T1 = 31 days.
P2 price is 4700.
P3 price is 4770.
Basis = (4770 – 4700) ÷ 31 = $2.258 IG charge = 4700 x 3% ÷ 365 = $0.386
Adjustment = $1 x ($2.258 - $0.386) = $18.72*
*$18.72 will be credited to your account as you were short, and the next future contract was higher than the front contract.
Shares & ETFs
Shares & ETFs
Borrow charge: When you are shorting a stock via cash CFD, you will incur a borrow charge. The borrow charge will be accounted for in a daily cash adjustment applied to your account. The charge varies according to the stock, is notified to us by our brokers or agents and includes a 0.5% administration fee.
*The borrow charge, and the ability to hold a short position, can be changed at short notice. To determine whether a borrow charge applies and if so, what the charge is, call our dealers in advance of trading.
Please note that open positions held through 2200hrs UKT (0500hrs SGT) on Fridays will be adjusted for three days' worth of funding to cover the weekend.
Formula:
Number of Shares x price x (3%* +/- ARR*) ÷ 360
Price = price at 10pm (UK time); + if long, – if short. 365-day divisor used for the FTSE 100 and other GBP and SGD denominated markets. 360-day divisor used for all other markets.
Example:
You're long 100 contracts on Singapore Exchange Ltd.
The closing price is 19.50
The 1-month ARR rate is 1.13%.
Cost = 100 x 19.50 x (3% + 1.13%) ÷ 360
= SGD 1,950 x 4.13% ÷ 360 = SGD 0.22 overnight charge
Frequently Asked Questions
What are the main costs of IG Markets CFD trading?
Spread – built into the buy/sell price for all products
Overnight funding charge – When you trade CFDs, you are trading on leverage — meaning we are effectively lending you the difference between your margin and the full value of your position. Overnight funding charges exist to cover the cost of that borrowing when you hold a position open past the daily cut-off time, which is typically 10pm UK time
Currency conversion fee – up to 0.5% of spot rate when closing a position denominated in a currency other than your base currency
Borrow charge – applies daily to short share positions (varies by share; includes a 0.5% admin fee)
2. How can I see my charges in IG Markets CFD trading?
To view all charges in your account,
Profile > Documents > Statements >CFD – select a custom date range to review all charges, OR
Activity Icon > CFD > Select filter as transactions
Overnight funding charges appear as separate line items in your transaction history and do not affect running P&L