Method: (Variance in Interest Rate– Cost of Financing)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
ECMarkets Cost of Financing is 1.5%. As stocks and commodities bear no interest, rates are derived from the value of the CFD’s currency. An example being the, NASDAQ, which is in dollars, so the rate of interest is set by the US Federal Reserve. The interest rate of a particular currency is set by that country’s central bank. Presently, the European Central Bank has set the rate of interest for the euro at 1.0%. The variance in Interest Rates shows the gap between the interest rate of the currency and of the primary product. A greater variance between the two interest rates results in a greater variance between the overnight rollover for long and short positions.
The amount of the position is calculated in units per 1 lot, for example with Crude Oil 10 barrels is the equivalent of 1 lot. Every CFD also has a base value calculated by ECMarkets. In the case that a CFD is priced in a currency other than USD, an exchange rate set by ECMarkets is used to calculate the rollover in USD.
The values for Overnight rollover for an individual CFD are located in the assets window within the trading platform.
Rollover values vary depending on if the position is maintained long or short. The values of Rollover are calculated based on individual lots and the concluding credit or charge of rollover shall be for the cumulative amount of lots maintained within a position.
ECMarkets Cost of Financing is 1.5%. As stocks and commodities bear no interest, rates are derived from the value of the CFD’s currency. An example being the, NASDAQ, which is in dollars, so the rate of interest is set by the US Federal Reserve. The interest rate of a particular currency is set by that country’s central bank. Presently, the European Central Bank has set the rate of interest for the euro at 1.0%. The variance in Interest Rates shows the gap between the interest rate of the currency and of the primary product. A greater variance between the two interest rates results in a greater variance between the overnight rollover for long and short positions.
The amount of the position is calculated in units per 1 lot, for example with Crude Oil 10 barrels is the equivalent of 1 lot. Every CFD also has a base value calculated by ECMarkets. In the case that a CFD is priced in a currency other than USD, an exchange rate set by ECMarkets is used to calculate the rollover in USD.
The values for Overnight rollover for an individual CFD are located in the assets window within the trading platform.
Rollover values vary depending on if the position is maintained long or short. The values of Rollover are calculated based on individual lots and the concluding credit or charge of rollover shall be for the cumulative amount of lots maintained within a position.
Example of the Crude Oil CFD Overnight Rollover Calculation:
Crude Oil Base Value is $77.40.
U.S. Federal Reserve Interest rate: 0.25%
ECMarkets Cost of Financing: 1.5%
The CFD Overnight Rollover Formula:
(Variance in Interest Rate– Cost of Financing)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
A long position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.04 overnight, based on the following calculation:
- 0.25% - 1.5% = -1.75%
-1.75%/36000 x $77.40 x 10 = -$0.04
A short position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.03 overnight, based on the following calculation:
0.25% - 1.5% = -1.75%
-1.75%/36000 X $77.40 * 10 = -$0.03
Thus a short position of 10 lots in Crude Oil would be charged -$0.30 overnight:
10 X -$0.03 = - $0.30.
U.S. Federal Reserve Interest rate: 0.25%
ECMarkets Cost of Financing: 1.5%
The CFD Overnight Rollover Formula:
(Variance in Interest Rate– Cost of Financing)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
A long position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.04 overnight, based on the following calculation:
- 0.25% - 1.5% = -1.75%
-1.75%/36000 x $77.40 x 10 = -$0.04
A short position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.03 overnight, based on the following calculation:
0.25% - 1.5% = -1.75%
-1.75%/36000 X $77.40 * 10 = -$0.03
Thus a short position of 10 lots in Crude Oil would be charged -$0.30 overnight:
10 X -$0.03 = - $0.30.
Example of the FTSE 100 CFD Overnight Rollover Calculation:
FTSE 100 Base Value is £4970.
Bank of England Interest rate: 0.50%
ECMarkets Cost of Financing: 1.5%
GBPUSD Exchange Rate: 1.6320
The CFD Overnight Rollover Formula:
(Variance in Interest Rate– Cost of Financing)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
A long position of 1 Lot (1unit) in the FTSE 100 CFD will be charged -$0.45 overnight, based on the following calculation:
- 0.50% - 1.5% = -2.0%
-2.0%/36000 x £4970 x 1 x 1.6320 = -$0.45
A short position of 1 Lot (1 unit) in the FTSE 100 CFD will be charged -$0.23 overnight, based on the following calculation:
0.50% - 1.5% = -1.0%
-1.0%/36000 x £4970 x 1 x 1.6320 = -$0.23
A short position of 20 lots in the FTSE 100 would be charged -$4.60 overnight: 20 x -$0.23 = - $4.60.
Bank of England Interest rate: 0.50%
ECMarkets Cost of Financing: 1.5%
GBPUSD Exchange Rate: 1.6320
The CFD Overnight Rollover Formula:
(Variance in Interest Rate– Cost of Financing)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.
A long position of 1 Lot (1unit) in the FTSE 100 CFD will be charged -$0.45 overnight, based on the following calculation:
- 0.50% - 1.5% = -2.0%
-2.0%/36000 x £4970 x 1 x 1.6320 = -$0.45
A short position of 1 Lot (1 unit) in the FTSE 100 CFD will be charged -$0.23 overnight, based on the following calculation:
0.50% - 1.5% = -1.0%
-1.0%/36000 x £4970 x 1 x 1.6320 = -$0.23
A short position of 20 lots in the FTSE 100 would be charged -$4.60 overnight: 20 x -$0.23 = - $4.60.
