Are S&P 500 CFD fees low at eToro as of November 2023?
We have good news! S&P 500 CFD fees are low at eToro compared to other brokers we have reviewed.
- CFD fees are made up of spreads, commissions and financing rates.
- Contrary to the spread and the commission, the financing rate is time sensitive: the longer you hold your position, the larger this cost will be.
- Some brokers charge no commission but quote a wider spread.
- A downside to CFD trading is that your initial position will immediately reduce when you open a position by the size of the spread.
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What are CFD fees?
CFDs, or contracts for difference, are financial contracts that allow you to speculate on the price movements of underlying assets, such as commodities, indexes, currencies. If you need a recap, we have put together the key information about CFDs here.
How are CFD fees calculated?
- Spreads - The spread is the difference between the buy and sell price. Since you enter into a contract with the broker, the broker can decide what spread it sets based on its own costs and market conditions. Check if the S&P 500 CFD spreads are low at eToro! Keep in mind that your initial position will be reduced by the spread once you enter the trade, so your trade must move in a positive direction to at least make up for that cost.
- Commission - Brokers could add an additional commission fee, which is based on the number of contracts you entered, or the value of your trade, or has a fixed rate. Brokers can decide to quote a wider spread and charge no commission.
- Financing rate, swap fee or overnight rate - It has different names, but means basically the same thing. When trading CFDs, you basically open your position with money borrowed from the broker, and there is a cost to it. As interest rates have risen in the past years, this part of the CFD fees have increased as well, so pay close attention to this particular cost. Contrary to the spread and the commission, this cost is time sensitive: the longer you hold your position, the larger this cost will become.
And one word about dividends. This makes less of a difference in the overall costs of trading CFDs, but you should be aware of it. Even though you don't own the underlying assets when trading CFDs, when you trade CFDs on a stock, or stock index like the S&P 500, you may receive a dividend adjustment, which is either added to or deducted from your trading account, depending on your position. If you are long (buying) a CFD on a stock that pays dividends, you may receive a dividend payment. If you are short (selling) a CFD on a stock, you may be charged a dividend adjustment, which will be deducted from your account.
Let's look into the specific costs of trading an S&P 500 CFD at eToro!
How much are S&P 500 CFD fees at eToro?
The S&P 500 CFDs are contracts that allow you to speculate on the price movements of the S&P 500 stock market index without owning any of the underlying assets, or stocks. The contract you make with your broker is based on the value of the S&P 500 index, which is a measure of the performance of 500 large companies listed on US stock exchanges. You can buy or sell the S&P 500 CFDs to profit from changes in the index's value.
S&P 500 CFD spread
S&P 500 index CFD fee
S&P 500 CFD commission
|No commission is charged||No commission is charged||No commission is charged|
S&P 500 CFD financing rate
Data updated on November 11, 2023
Keep in mind that non-trading fees, that are charges not directly related to a given trade, will be included in your overall costs too. Non-trading fees typically include the account maintenance fee, deposit/withdrawal fees, and the inactivity fee.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Looking for a CFD broker?
If you are looking for the brokers that offer the best CFD trading conditions, check our top recommendations of the best CFD brokers in the world.
If you have any feedback or questions, feel free to contact us via email!
Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.
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