What are the hidden costs I should look for when trading indices?
Verdict
- The spread is the visible cost of an index CFD; the less visible ones are overnight financing on cash CFDs, the wider spread on forwards, currency conversion on foreign indices, and slippage when markets gap. Pepperstone, our pick for Australians, publishes its index spreads and charges no commission on index CFDs.
- Forwards cost more to enter: at Pepperstone the AUS200 forward has a 3-point minimum spread, against 1 point on the cash CFD.
- Trading US indices from an AUD account means currency conversion on profits and losses; Pepperstone lets you hold a USD account to avoid it.
- Pepperstone has no guaranteed stops, so gap slippage is a real cost to plan for; it charges no inactivity or withdrawal fees in Australia.
Index CFDs look cheap: a point or two of spread on the ASX 200 or the S&P 500, often no commission. The costs that surprise people are the ones that only show up after the trade is open. Here is a line-by-line list, with what Pepperstone charges for each.
Pepperstone's index pricing, and where the extras sit
Pepperstone publishes minimum and average spreads for its index CFDs in Australia, based on August 2026 data, and adds no commission. The AUS200 averages 1.5 points on both Razor and Standard; US500 averages 0.4 on Razor. That makes the entry cost easy to count. The rest of the bill depends on how long you hold, which contract you choose and which currency your account is in, and those are the lines to check before you trade.
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The cost checklist
| Cost | When it hits | At Pepperstone |
|---|---|---|
| Spread | Every trade | Published: e.g. AUS200 1.5, US500 0.4, NAS100 1 (Razor averages) |
| Commission | Every trade | None on index CFDs |
| Overnight financing | Each night a cash CFD stays open | Check the swap rate in the platform |
| Forward premium | On entry to a dated contract | Wider spreads: AUS200-F min 3, US500-F min 1 |
| Currency conversion | P&L on a foreign index in an AUD account | Avoidable with a USD base account |
| Gap slippage | Stops filled past their level | No guaranteed stops offered |
| Inactivity and withdrawal fees | Idle account; cashing out | None in Australia |
The three that catch people out
Financing is the big one for swing traders. A cash index CFD has no expiry, so the broker charges (or occasionally credits) a financing amount for each night the position is open, scaled to the full position size, not your margin. Over weeks it can exceed the spread many times over. Forwards fold that holding cost into the price instead, which is why their spreads are wider: Pepperstone's NAS100 forward has a 3-point minimum against a 1-point cash average. Currency is the quiet one: a profitable S&P 500 trade in an AUD account can shrink if the Australian dollar rises before you convert. Gaps are the painful one: at the open, a stop can fill well beyond its level.
How to keep the extras small
- Intraday only? Use the cash CFD and close before the daily cut-off.
- Holding for weeks? Compare total expected financing with the forward's extra spread.
- Trading US indices often? Open a USD-based account alongside your AUD one.
- Worried about gaps? Trade smaller, or use a broker offering guaranteed stops; Capital.com (AFSL 513393) does.
Sources
Does Pepperstone charge commission on index CFDs?
No. The spread is the only dealing charge on Pepperstone's index CFDs, on both Razor and Standard.
Are dividends a cost on index CFDs?
They can be. When index constituents go ex-dividend, brokers typically make a cash adjustment: credited to long positions and debited from shorts. Check how it appears on your statement.
Is there a fee for holding an index CFD over the weekend?
Financing is charged for each night a cash CFD is held, weekends included. Check in the platform which day weekend nights are applied.
Index CFDs are leveraged derivatives and can lose money fast, including through costs that accrue while a position is open. Read the PDS before trading. General information only, not advice.