How do overnight financing charges work on spread bets in the UK?
Verdict
- On a rolling (daily) spread bet, you pay a financing charge for each night your position stays open past the broker's cut-off; at Pepperstone, our top pick, that cut-off is 10 pm UK time.
- The charge is calculated on the full value of the position, not on your margin, which is why it grows quickly on leveraged bets held for weeks.
- Long and short positions are charged differently, because the rate reflects interest-rate differences and the broker's own fee.
- UK residents can't avoid it with a swap-free account at Pepperstone or Capital.com: neither firm lists the UK among the countries eligible for one.
Overnight financing is the cost of keeping a leveraged spread bet open from one trading day to the next. It is invisible on a day trade and dominant on a long hold. Here is the mechanism, a worked example, and the questions to ask any UK provider before you carry a position.
The mechanism, and Pepperstone's cut-off
A rolling spread bet has no expiry, so the broker effectively funds the full position each night. If your bet is still open at the daily cut-off, a financing adjustment is applied to your account. Pepperstone applies overnight fees to spread bets held past 10 pm UK time and charges no commission on spread bets, so a bet closed before the cut-off pays only the spread. It is our pick for UK spread betting on published spreads and platform choice.
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How the charge is calculated
Providers generally work from three inputs: the position's value (stake per point times the price in points), an annual rate made of a benchmark interest rate plus or minus the broker's margin, and the number of nights held. The nightly charge is roughly position value times annual rate divided by 365. The table uses a made-up 7% annual rate purely to show the arithmetic; it is not any broker's rate.
| Nights held | Approximate charge |
|---|---|
| 1 | About £1.92 |
| 5 | About £9.59 |
| 30 | About £57.53 |
| 90 | About £172.60 |
Things that change the bill
- Direction: longs and shorts carry different rates; on some markets a short can be charged less, or even credited.
- Weekends: providers handle Saturday and Sunday differently, sometimes charging them on one weekday. Ask which.
- Leverage: financing is on the full value, so with 1:30 leverage a £100 margin can mean financing on about £3,000.
- Dated bets: some providers offer forward or futures-based bets that build financing into a wider spread instead of charging nightly. Check whether your provider has them on the market you trade.
No swap-free route for UK residents at our top two
Pepperstone's swap-free account is restricted to residents of 23 listed countries, and Capital.com's to 12 countries in the Middle East and North Africa. The UK is on neither list, so UK spread bettors at both firms pay overnight fees when they hold positions.
Before you hold a spread bet overnight
- Look up the long and short financing rates for the market in the platform.
- Multiply the daily figure by how long you expect to hold.
- Compare that with the expected move: a bet aiming for 20 points over a month can lose much of its edge to financing.
Sources
Do I pay overnight financing on a spread bet closed the same day?
Not at Pepperstone if you close before 10 pm UK time.
Is overnight financing charged on my margin or on the full position?
On the full position value, which is why it adds up on leveraged bets.
Can a short spread bet earn financing?
On some markets, depending on interest rates and the broker's fee, a short can be charged less or credited. Check the live rate.
Spread bets are leveraged and high risk; holding costs reduce returns and losses can build quickly. The 7% rate above is hypothetical and used only to show the arithmetic. This is not investment or tax advice.