What overnight financing costs apply to CFD trading?
Verdict
- Overnight financing (swap) is a daily charge, or occasionally a credit, on any CFD position still open at the broker's daily cut-off; Pepperstone, our pick for Singapore traders, applies it like every CFD broker.
- Brokers work it out from the full position value, not your margin, using a benchmark interest rate plus or minus their own mark-up.
- Pepperstone's perpetual CFDs use a different model: a funding rate set weekly in advance and applied daily at 5 pm New York time.
- Pepperstone's swap-free account is open only to residents of 23 listed countries, and Singapore is not one of them.
Spread and commission are paid once per trade; financing is paid for every night you hold. For a trader keeping positions for weeks, it can become the biggest cost on the statement. Here is how it is calculated, which products it hits, and what Pepperstone publishes about it.
Financing at Pepperstone, and why we still recommend it
Pepperstone charges or credits financing on positions held past its daily rollover, as every CFD broker does; our data holds no published advantage for it on financing rates. Its advantage lies in the costs you pay on every trade: a published Razor average of 0.1 pips on EUR/USD plus commission, no deposit fees and no inactivity fee. If you mostly close trades within the day, financing barely touches you and those trading costs matter far more.
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How do brokers calculate overnight financing?
The general method is the same across CFD brokers, though each sets its own mark-up and benchmark. Financing is worked out on the full notional value of the position, then divided into a daily amount:
- Index, commodity and share CFDs: position value × (benchmark rate ± broker mark-up) ÷ days in the year. Long positions usually pay; shorts may pay less or receive a little.
- Forex: based on the interest-rate gap between the two currencies in the pair, minus the broker's mark-up, so one side of a pair can earn while the other pays.
- Illustration only, not a Pepperstone rate: a $20,000 index position at a combined 6% a year costs about $20,000 × 6% ÷ 365 = $3.29 a night, roughly $99 over 30 nights.
- Because the charge sits on the notional value, using more leverage does not lower it; it only lowers the margin you put up.
Products with different financing rules
Pepperstone's perpetual CFDs have no expiry and no standard swap: a funding rate is set a week in advance and applied daily at 5 pm New York time. The Bahamas entity's retail margin table lists GOLD-PERP, NAS100-PERP, US500-PERP, WTOIL-PERP and BRENTOIL-PERP. Pepperstone also prices index forwards, which carry wider published minimum spreads than cash indices (US500-F from 1 point against 0.4 on US500). For a longer hold, compare that one-off spread with the nightly financing on the cash CFD, and read the forward's own terms first.
Swap-free is not an option from Singapore
Pepperstone's swap-free account is limited to residents of 23 listed countries, including Malaysia, Indonesia and Brunei; Singapore is not on the list. Even where it applies, it is not free to hold: once a trade has been open for five days, an admin charge per standard lot applies, which the page lists as USD 100 for FX and precious metals. Phillip Securities, a MAS-licensed alternative, states plainly that swap adjustments apply to overnight FX CFD positions.
Ways to keep financing under control
- Check the long and short swap for the instrument before you open a trade you might hold.
- Close or reduce positions before the daily cut-off when you have no reason to hold.
- For holds of weeks or months, compare a forward or perpetual CFD with the cash CFD.
- Record financing as its own line in your trading log, separate from spread and commission.
Sources
Broker pages on financing and related products.
Is overnight financing charged on day trades?
No. It applies only to positions still open at the broker's daily cut-off. Close before then and you pay spread and commission only.
Can financing ever be paid to me?
Yes, on some forex positions, when the currency you hold earns more interest than the one you sold after the broker's mark-up. On most index and share CFD longs you should expect to pay.
Do Pepperstone's perpetual CFDs charge swap?
They use a funding rate instead, set weekly in advance and applied daily at 5 pm New York time, with no expiry date.
CFDs are leveraged products and you can lose money rapidly; overnight financing adds to that cost the longer you hold. The worked example is an illustration, not a quoted rate. This page explains how costs work and is not investment advice.