Overnight financing examples for Spread Betting

1. Shares

UK Shares

BUY £10 per point of a Rolling Daily

Unit risk	1	(4.75% + 2%)
Applicable interest rate	6.75%
Closing price	750.10p

A £10 long position which has a closing price of 750.10p would be equal to £7,501 market exposure (this equates your trade to the number of shares you would have to buy from your stockbroker to create the same market risk, a £10 trade = 1000 UK shares).

(750.10 / 1) x 10 x 6.75% = £506.32

This is the annual cost of borrowing £7,501 at 6.75%.

Divide this by 365 to reach the daily charge:
£506.32 / 365 = £1.39

As you are long of a share, your account would be debited £1.39 for the overnight funding.

US Shares

Unit risk	0.01	(2% + 2%)
Applicable interest rate	4%
Closing price	$26.49

[(26.49 / 0.01) x 10 x 4%] / 365 = £2.90
Your account would be debited £2.90 for the overnight financing.

2. Indices

UK Indices

SELL £10 of UK 100 Rolling Daily

Unit risk	1	(4.75% - 2%)
Applicable interest rate	2.75%
Closing price	4722

[(4722 / 1) x 10 x 2.75%] / 365 = £3.56
Your account would be credited £3.56 as overnight financing.

US Indices

BUY £1 of Wall Street Rolling Daily

Unit risk	1	(2% + 2%)
Applicable interest rate	4%
Closing price	10350

[(10350 / 1) x 1 x 4%] /365 = £1.13
You are debited £1.13 for holding this position overnight.

3. Currencies

BUY £10 of GBP/USD Rolling Daily

Unit risk	0.0001	(2% - 4.75% + 2%)
Applicable interest rate	- 0.75%
Closing price	1.8550

[(1.8550 / 0.0001) x 10 x - 0.75%] / 365= -3.81
Your account would be credited £3.81 as overnight financing.

Normally, for a buy position you would be charged the overnight financing but because this calculation has returned a negative number, you will actually receive this amount.

SELL £5 of GBP/USD Rolling Daily

Unit risk	0.0001	(2% - 4.75% - 2%)
Applicable interest rate	- 4.75%
Closing price	1.8550

[(1.8550 / 0.0001) x 5 x -4.75%] / 365 = -12.07
Your account would be debited £12.07 as overnight financing.

Please note that as with the previous example of a long position, this has returned a negative number but in this case, as this is a sell position, instead of you receiving the money you will be paying it.

The rates used for the examples above are indicative and are not necessarily representative of correct rates.