Trading costs

There are no distinctly separate commissions or transaction fees to pay when you spread bet with us. We have removed these individual charges and have built the cost of trading into the price quoted on screen, providing greater transparency so you always know what you’re paying for.
By building this cost into the price, the effect is a slight widening of the spread between the buy and sell prices on company instruments.

The difference between the buy price and the sell price is called the spread. The smaller the spread, the less it will cost you to enter that transaction. Spreads are slightly wider outside of market hours for products like indices that trade 24 hours a day. This is due to lower trading activity (liquidity) in the market during these times.

When looking at the price quote window, the spread can be calculated as the difference between the last large numbers within the buy and sell quote window. In the Crude Oil West Texas example below, the spread will be 4 points. Therefore, for each €1 per point bet you make on this trade the spread cost will be €4.

Note: Unlike some of our competitors, many of our products offer additional decimal places within the price (as shown by the small 8 at the end of the Crude Oil price above). We do this to give our customers a more accurate view of the underlying price. It also allows us to offer fractional spreads on many instruments.

You can view historical spreads at any time using our spread charts:

In respect of each Bet that remains open at the end of each calendar day, 17:00 New York time, a Bet Financing Cost will be calculated and applied to your account. The Bet Financing Cost comprises two components: (a) Bet Borrowing Cost and (b) Bet Holding Cost.

Bet borrowing cost
Borrowing costs only apply to indices, companies, treasuries and commodities. When you enter into a bet, the 'margin' required only makes up a small part of the Opening bet value, known as the “Funded portion”. The remainder of the 'Opening bet value is the “Unfunded portion” that is provided by CMC Markets.

The Bet borrowing cost is calculated with respect to the Unfunded Portion only, using the following formula:

Bet holding cost (also referred to as carrying costs). These apply to commodities, treasuries and currencies only

Trading directly in some assets, like commodities, treasuries and currencies, carries an associated cost or benefit of physically holding that asset for a period of time. For instance, if you buy crude oil, there is interest, storage and seasonal costs (or benefits) associated with holding that crude oil until the delivery date. This is known as the Holding cost and is calculated using the following formula:

Note: For companies and indices, carrying costs do not apply. Price adjustments are applied when there is a price movement associated with a corporate action or dividend declaration.

Once the Bet Borrowing Cost and Bet Holding Cost have been determined, the Platform will calculate the Bet Financing Cost using the following formula:

Bet financing cost = Bet borrowing cost + Bet holding cost
The net Bet financing cost payable by you to us for any day is the sum of all Bet financing costs for the same day. The platform will update your account at the end of each calendar day at 17:00 New York time with the net bet financing cost. You must have sufficient money on your account to meet the net Bet financing cost. If the instrument is not priced in your local currency, the current CMC currency conversion rate would be applied to the holding cost total.

Example of bet financing costs
Imagine that you decide to take advantage of a rising oil market so you buy the commodity Brent Crude Oil. Your trade’s total position value is €10,000 and the margin for this product is 3%, so your initial margin is only €300. You have therefore borrowed the remaining amount from CMC Markets, a total of €9,700.

CMC Markets current borrowing rate is the Reuters zero coupon rate plus 2%. If the Reuters Zero Coupon rate is 1% your borrowing rate will be 3%

• Bet Borrowing Cost = (€9,700 x 3%) / 365
• Bet Borrowing Cost = €0.80 per night

Theoretically, by buying this commodity, you would take on the cost of storing that crude oil until the delivery date. As such, there is a holding cost which needs to be factored into the bet cost.

Holding rates vary between products but let’s assume the rate in this instance is 1.5%. Your holding cost will equal:

• Holding Cost = (€10,000 x 1.5%) / 365
• Holding Cost = €0.41 per night

Bet Borrowing Cost = Borrowing Cost + Holding Cost

Holding Cost = €0.80 + €0.41 = €1.21 per night

Bet financing costs statement
You can view your trading costs any time you like by clicking on the Account icon, then the History tab. Every day, just after 17:00 New York time, any financing cost applicable for the previous day’s trading will be calculated and deducted from your account. Simply click on the summarised financing line and a detailed description of each charge with financing rates and carry costs will be available.

Note: You must have sufficient money in your account to meet the net holding costs.