Since contracts for difference (CFDs) require a fair bit of legwork from your CFD provider, the fees are slightly more complicated than ordinary brokerage. Before you start trading CFDs, you’ll need to dig around to understand all the fees. In this video, Simon Brown explains how the transaction fee will be the starting point of your investigation. This cost will most often be expressed as a percentage and is charged on the exposure amount.
It’s also important to understand how your CFD provider pays and charges Interest is how much it costs to borrow money. You can either earn interest when you lend money to somebody else or pay interest when you borrow money. Interest is the reason why debt is expensive. In addition the money you borrowed, you have to pay back an additional fee in exchange for using money that you didn't have. These More. The first interest is on your cash balance in your CFD account. You need to compare how much interest you’ll receive between providers. You also pay on your exposure, if long, or receive interest on your margin.
Knowing how When a listed company shares profits with its shareholders, the cash amount paid to the shareholder account is called a dividend. It's usually expressed as cents per share or, in the case of ETFs, cents per unit. The more shares or ETF units you have, the more dividends you receive. These posts discuss dividends in more detail: OUTstanding money: Dividends More are treated is also important, see our video on CFDs and dividends.
Lastly, you could potentially pay a platform fee. Many CFD providers will offer free platform access, but charge for supplementary features like advanced charting. This video will help you understand all fees you might be liable for in your CFD account.
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