CFD financing: paying interest on the whole barrel

A CFD position controls the full barrel while you post a sliver of its value. The rest is borrowed, and borrowed money has a nightly price.

The meter runs on the notional

The charge is calculated on what the position controls - module 1's notional - not on the margin you posted. The deposit decides whether you can open the position; the notional decides what holding it costs. Brokers quote it as a nightly amount per lot or a rate over a benchmark, and the honest way to read it is as an interest bill: you have borrowed most of a contract's value, and the lender charges for every night of the loan.

What it does to holding periods

Work the example below. A financing cost that reads as trivial per night becomes a serious fraction of any realistic profit target over a month - and it is charged on losing positions with exactly the same enthusiasm. This is the cost that quietly redefines what kind of trader a CFD account can afford to hold: the wrapper is built for days, and its pricing says so even where its marketing does not.

Three habits

• Find the actual nightly figure for your instrument and size before entry. It is on the broker's specification page, not the ticket.
• Multiply it by your intended holding period and set it against the trade's target. If the financing eats a third of the target, the trade needs to be either faster or bigger in expectation - or not taken.
• Watch for the weekend multiplier: one night of the week usually charges three, to cover the days the market is shut.