The costs incurred when trading CFDs consists of Spreads, Swaps, Commissions and/or Performance fees.
Spread: refers to the difference in the bid and ask price of an underlying financial instrument. The bid price refers to the rate at which a broker or a market maker is buying from the trader and the ask price is the rate at which it is selling to the trader. The Client enters a buy trade using the ask price and exit the trade using the bid price.
For example:
Consider a retail forex trader who wants to trade EURUSD pair and buys EUR 100,000 on leverage. The current quote in the market is EUR 1 = USD 1.0621/1.0624.
The bid-ask spread in this case is 3 pips. The spread as a percentage is 0,003 % of the traded amount of USD 100,000 and the Client opens the trade in minus 30 USD due to the spread.
Swap: a swap fee is charged when a position is kept open overnight. A swap is the interest rate difference between the two currencies of the pair a client is trading, and it is calculated according to whether the position is long or short. The Company charges swaps once for each day of the week that a position is held open overnight, while on Friday night swaps are also charged for Saturday and Sunday.
Commission: a commission is a service fee charged to clients by the Company in return for opening and closing of each transaction in shares only.
Performance fee is a fee that is charged to all clients, who use social trading services running by the Company. It is charged on a monthly basis provided that client’s portfolio increased compared to the highest value of client’s portfolio at the end of any previous month.
Management fee: Holding Physical Stocks leads to the management fee which will be charged at the end of each business day. Please note, that on Wednesdays the fee will be tripled. Please find the Management fee here