What is Spread?
The spread is the deference between the Bid and Ask price of a CFD and represents part of the cost of trading when trading CFDs other than Share CFDs. CFD prices for Share CFDs mirror the underlying market with no additional markup.
What is Commission?
Commission is the percentage of the contract value paid to the broker every time a transaction is carried out. It differs for each contract and while minimum commission charges still apply.
Commission Illustration
Benjamin bought (Long) 3,000 contracts of Stock A at $2.00. If the commission for that contract is 0.128%,
Opening Commission = 3,000 * $2.00 * 0.128% = $7.68 (Since minimum commission for is $10, Benjamin pays $10)
4 days later, Benjamin sold the contracts at $2.10.
Closing Commission = 3,000 * $2.10 * 0.128% = $8.06 (Since minimum commission for is $10, Benjamin pays $10)
Total Commission to Open and Close the contracts = $10 + $10 = $20
What is Finance Charge?
It is the charge imposed to reflect the cost of funding for holding a position overnight. It is calculated based on the contract value of the entire position marked to the closing price of the day. There is no finance charge if you close your position on the same day.
Finance Charge Illustration
Chloe bought (Long) 3,000 contracts of Stock A at $2.00 at 10:00 am. At 2:00pm, the price of Stock A had moved to Chloe’s Target Profit of $2.10 and she decided to close her positions. If the commission for that contract is 0.128% with a minimum of $25, the total finance charge charged to her is $0.
There is no finance charge if you liquidate the position within the same day.
Finance Charge Illustration
Derrick bought (Long) 3,000 contracts of Stock A at $2.00. 4 days later, the price of Stock A went up to $2.10 and Derrick decided to sell the 3,000 contracts. Assuming the long finance charge for Stock A is 2.5% p.a. The table below shows the closing price for Stock A for the first 3 Days
| Stock A | Finance Charge |
| Day 1 Closing Price : $2.01 | = 2.01 * 3,000 contracts * 2.5% *1/365 days = $0.41 |
| Day 2 Closing Price : $2.04 | = 2.04 * 3,000 contracts * 2.5% *1/365 days = $0.42 |
| Day 3 Closing Price : $2.07 | = 2.07 * 3,000 contracts * 2.5% *1/365 days = $0.43 |
| Contracts Closed on Day 4 at $2.10 | No Finance Charge Charged on Closing Day! |
Total Finance Charge Charged to Derrick is $0.41 + $0.42 + $0.43 = $1.26
