CFD Trading FAQs
- What are CFDs?
- What types of CFD markets does FOREX.com offer?
- What is the cost of CFD trading?
- What is the CFD nightly finance charge and how is it calculated?
- When do CFD orders expire?
What are CFDs?
A CFD, or contract for difference, is an agreement to exchange the difference between the opening and closing price of the position under contract, rather than buying and selling the underlying security outright.
What types of CFD markets does FOREX.com offer?
With FOREX.com, you can trade a range of global stocks including commodities and indices as CFDs. Click here to view our range of markets.
What is the cost of CFD trading?
FOREX.com is compensated by the spread, which is the difference between the bid and ask prices. View our live spreads.
In addition, you may be charged a nightly finance charge if you hold a position overnight, after 5pm ET.
To learn more about CFD costs and commissions, visit our CFD trading costs academy page.
What is the CFD nightly finance charge and how is it calculated?
With most CFDs, financing is debited for long positions or credited for short positions daily if you are in a position at 5pm ET.
These charges are typically calculated as follows:
F=(S x P x R)/D
F - Daily Financing Charge
S - Number of CFDs (2500)
P - Closing Price
R - Relevant interest rate benchmark, +250 basis points for long positions or -250 basis points for short positions, e.g. (4.50% + 3.00%) = 7.50%
D - Number of days, i.e. 365 for UK stocks and 360 for all others
When do CFD orders expire?
FOREX.com offers two types of CFDs: futures CFDs, which are dated for a specific contract month and expire, and cash CFDs, which are non-expiring and roll into the next contract month, with a basis adjustment (credit or debit in the difference between contract months). Note that only the futures CFDs are available on the MetaTrader 4 platform. You can check standard expiry definitions here. This can also be found under the Market 360 tab for each market on the FOREX.com Web Trading platform, or under the Company tab in the Terminal window of MetaTrader 4.
When a CFD futures market expires, we close all open positions based on our most recent prices and all open orders are cancelled. To retain your open positions in a market, you must manually open a new position in the next contract month.