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CFD financing rates at Comdirect

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Eszter Z.
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Are CFD financing rates low at Comdirect as of November 2023?

Unfortunately, CFD financing rates are overall high at Comdirect, based on the rates for four different CFD products, so you are probably better off shopping around for other options.
  • The financing rate (also called an overnight rate) is a particularly important cost element of CFD trading if you want to hold your position overnight.
  • It is a time-sensitive charge: the longer you hold your position, the higher this trading cost will be.
  • Brokers usually charge different financing rates for different types of underlying assets.
  • We consider overall financing rates high at a broker if the rates on four different assets we analyzed add up to be high (see table below), compared to other CFD brokers.
  • Keep in mind that there are other fees, such as non-trading fees, involved in your total trading cost.
  • If you are not sure what financing rates are, read on, and we will break it down for you in this article.

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What are the CFD financing rates at Comdirect?

BrokerChooser's analysts have reviewed over a hundred brokers. They have calculated an average for the CFD financing rates of these brokers by checking the financing rates for four key CFD products. Comdirect's CFD financing rates are overall high, compared to the average of the other brokers our analysts have checked.

Here is an overview of the financing rates at Comdirect for the four CFD products (2 stock, 2 stock index) that we checked, compared to the financing rates at the closest competitors of Comdirect:

CFD Financing Rates at Comdirect
CFD financing rate class
High Average -
Apple CFD financing rate
8.9%
7.3%
-
Vodafone CFD financing rate
8.7%
5.7%
-
S&P 500 CFD financing rate
8.9%
7.3%
-
Euro Stoxx 50 CFD financing rate
7.4%
4.9%
-

Data updated on November 30, 2023

What is the financing rate for CFDs?

You might have heard it being called a swap fee, or overnight rate, but it means basically the same thing. It is one of the key costs of CFD trading. To recap, CFD is a financial instrument which offers a way to leverage your investments and access a wide range of assets without actually having to own any of them.

While trading CFDs, you can open your position with money borrowed from the broker (leverage). If you hold the position open for more than a day, the broker will charge you a cost for it. For this borrowed money, you have to pay interest (or, in some cases, you can also receive interest). This brokerage fee is called the financing rate.

  • Financing rates can be either positive or negative, depending on whether you are long or short on the CFD. If you hold a long position overnight, you are essentially borrowing funds from the broker to buy the underlying asset. In this case, you will pay the financing rate, which is typically a combination of the benchmark interest rate of the currency in which the asset is denominated and an additional fee charged by the broker.
  • On the other hand, if you hold a short position overnight, you are essentially selling the underlying asset but you do not receive the proceeds in cash that is why you receive the financing rate. The amount you get will depend on the benchmark interest rate of the currency in which the asset is denominated and the fee charged by the broker. If the benchmark interest rate is lower than the broker's overnight fee, you may receive a negative financing rate, meaning that you will pay interest on the asset that you have sold.

Financing rates are usually closely linked to overall benchmark interest rates. This means that if interest rates are high, financing rates will also be higher, so you are likely to pay more overall in financing rates than in a low-interest economic environment.

Contrary to the spread and the commission, which are one-time fees, this trading cost adds up over time: the longer you hold your position, the larger your financing cost will be. So design your trading strategy accordingly!

How are CFD financing rates calculated?

Financing rates vary depending on your broker, what asset you are trading CFDs in, and what currency they are traded in. Here is an example of how your financing rate might be calculated when trading of Company X stock CFDs!

Let's say that you want to trade CFDs on the stock of Company X, which is listed on the New York Stock Exchange (NYSE). You decide to short (sell) 1,000 shares of Company X at a price of $50 per share, with a total position size of $50,000.

Your broker's overnight fee for NYSE-listed stocks is 3.5% annually, and the benchmark interest rate for the USD currency is 5% per year. Assuming that there are no dividends or other charges, the financing rate for your short position would be calculated like this:

  1. Calculate the notional value of your position: 1,000 shares x $50 per share = $50,000.
  2. Calculate the daily financing charge (as it is a short position and the benchmark rate is higher than the broker's fee, it is a “negative” charge, you will receive this amount): $50,000 x (5% - 3.5%) / 365 = $2.05.
  3. Multiply the daily financing charge by the number of days that you hold the position overnight: e.g., for 5 days it would be $2.05 x 5 = $10.25.

In this example, your financing rate (i.e. the amount you receive) would be $2.05 per day, for holding a short position overnight. But remember, financing rates can vary depending on the broker, and the asset being traded.

What are the other CFD fees?

  • The key cost of CFD trading is the spread, which is the difference between the bid price and the ask price of the CFD. It is essentially the cost of trading, and it is paid to the broker. The spread the brokers set can vary depending on the volatility of the underlying asset and market conditions.
  • Some brokers may also charge a commission on CFD trades. This is typically a percentage of the value of the trade. Some brokers might offer a wider spread and not charge any commission.
  • Don't forget the non-trading fees either! These are not directly linked to the trade you make, and can vary based on the type of account you have, and which broker you have signed up with. These charges may include withdrawal/deposit fees, conversion fees and inactivity fees.

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Author of this article

Eszter Zalán
Eszter Zalán

Eszter is a former Editor and Financial Journalist for BrokerChooser. She wrote and edited BrokerChooser's content from 2021 onwards, bringing her more than a decade-long experience in journalism to the team. She has covered world affairs and several financial crises, and dove deep into SEO and coding to make BrokerChooser's content more accessible to users.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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