Understanding CFD Trading Costs
There are only two charges associated with CFD Trading, namely commission and finance charges.
Charges on the CFD investment account takes place only when transactions occur. Commission is charged typically when the investor opens a CFD position, and when he closes the position. For example, a client buys 1,500 CFDs of XYZ Corp at the price of $ 14.50 and sells it within the same day at the price of $14.60. Assuming the commission rate is 0.1% and minimum commission is $12.50:
|Buying commission||= 1,500 * $14.50 * 0.1%||= $21.75 (23.93 including GST)|
|Closing commission||= 1,500 * $14.60 * 0.1%||= $21.90 (24.09 including GST)|
In the example the client has paid 0.1% ($43.65) for the total value of the buy and sell trades.
Finance charges are imposed on CFD trades due to the inbuilt leverage of the product which is essentially a borrowed component. Market to Market contract value is the total position value based on the last traded price or closing price of the relevant positions.
There are no account opening, account closure or account maintenance fees to be paid on your PhillipCapital CFD investment accounts. Clients also do not have to pay exchange clearing and access fees. However, in the event the client incurred debit balance in the ledger debit interest will be applied at a rate relevant to the currency that is in debit.