A trader who has understood forex swaps often assumes the same mechanism applies to an index or an oil position. It does not. The forex swap arises from holding two currencies at once, so the charge is a differential and can fall either way. A CFD on an index or a commodity has no second currency leg. What you hold is a leveraged exposure funded by the broker, and what you pay is the cost of that funding on the whole position, not on the margin you posted.
The essentials
- Index and commodity CFD financing is charged on the full notional value, not on your margin.
- The rate is an overnight benchmark plus a markup, applied to long and short positions asymmetrically.
- Cash index CFDs also carry dividend adjustments on ex-dividend dates.
- Futures-based CFDs charge no daily financing but roll at expiry with a price adjustment.
Why the notional, not the margin
Open one contract of a major index CFD at 5,000 index points with a contract size of one unit per point and you control 5,000 units of exposure. At 5% margin you posted 250. The broker, however, is carrying the full 5,000 for you, and it charges for that. Financing is calculated on the exposure, which is why an apparently small position can accumulate a charge that looks disproportionate to the account balance.
This single fact explains most of the surprise on a first CFD statement. A trader used to forex, where the swap on a mini lot is measured in cents, opens an index position of similar margin and finds a nightly charge an order of magnitude larger. Nothing has gone wrong. The leverage on indices is typically higher, so the same margin buys a much larger notional, and the financing follows the notional.
Benchmark plus markup
The rate applied is an overnight interbank benchmark for the currency the instrument is denominated in, plus a broker markup — commonly in the range of 2% to 3% annualised, though it varies widely and is disclosed in the contract specifications rather than the marketing pages. A long position pays benchmark plus markup. A short position receives benchmark minus markup, which means a short earns financing only when the benchmark exceeds the markup, and pays when it does not.
That asymmetry has become far more visible since benchmark rates left the floor. When the relevant overnight rate sat near zero, shorts almost always paid, and the direction of the charge was easy to remember. With benchmarks meaningfully above the typical markup, a short index position can now be paid to stay open, and a long position that was nearly free to hold has become expensive. Any rule of thumb learned before that shift needs rechecking against the current schedule.
The annual rate is divided, not applied
A quoted financing rate is annualised. The nightly charge divides it by 360 or 365 depending on the currency convention, and applies it to the notional. A 7% annualised rate on a 5,000 notional is roughly 0.97 per night, not 350.
Weekends and the triple charge
Financing accrues for every calendar day a position is held, but it is only booked on trading days. Positions held over a weekend are therefore charged for three days at once, normally on the Friday rollover. Some brokers move the triple charge to Wednesday to mirror the forex convention; others leave it on Friday, which is the more logical placement for an instrument with no settlement lag. The contract specifications say which, and it is worth knowing before you plan a Thursday entry.
Public holidays behave the same way. A market closed for several consecutive days accumulates financing across all of them, applied on the first day the market reopens.
Dividend adjustments on cash indices
A cash index CFD tracks the spot value of an index, and that value drops mechanically when its constituents go ex-dividend. Since a CFD is a derivative on the index rather than ownership of its members, the broker neutralises that mechanical drop with a cash adjustment: a long position is credited the dividend, a short position is debited it.
This is not a profit or a loss; it offsets the index movement it accompanies. But it is booked separately on the statement, which makes it look like one. On indices with concentrated dividend seasons, a short position held through the peak weeks can face adjustments that materially exceed the financing over the same period.
Note that the adjustment applies to the index constituents' dividends net of any withholding assumption the broker makes, and brokers differ on that assumption. Two brokers can credit noticeably different amounts for the same index on the same date.
Futures-based CFDs and the roll
Commodity CFDs are more often written on a futures contract than on a spot price, because a spot price for a barrel of oil is not a tradable thing. A futures-based CFD carries no daily financing, since the cost of carry is already embedded in the futures price. Instead it has an expiry.
When the underlying contract nears expiry, the broker rolls the position into the next month. The two contracts trade at different prices, and the difference is neutralised by a cash adjustment so that the roll itself neither creates nor destroys value for the position holder. What the roll does change is the price your position is now marked against, which can be disconcerting if you are watching a chart that jumps at the roll while your profit and loss does not.
Check whether your commodity CFD rolls or expires
Not every broker rolls automatically. Some close the position at expiry and leave it to the client to reopen, which turns a long-term commodity view into a series of manual re-entries, each paying the spread. The contract specification states the roll policy; the marketing page rarely does.
Making financing part of the decision
For a position held minutes or hours, financing is irrelevant. For anything held across nights, it belongs in the trade plan, priced before entry rather than discovered on the statement. The calculation is simple: notional times annualised rate divided by the day count, times the number of nights you expect to hold.
Pricing a multi-night CFD position
- Find the instrument's contract specification and read the financing formula, not the marketing summary.
- Note the benchmark, the markup, and the day-count convention.
- Multiply the notional you intend to open by the annualised rate and divide by the day count.
- Multiply by the number of nights, remembering weekends count three.
- For cash indices, check the dividend calendar of the constituents over your holding period.
- Compare the total against the move you expect to capture.
A position that needs a 2% move to be worth taking, held for six weeks against financing that costs 0.8% over the same period, is a different proposition from the one the chart suggested. The financing does not make the trade wrong; not counting it does.
Common questions
Why is my index CFD financing so much larger than my forex swap?
Because financing follows the notional, and index CFDs are usually offered at higher leverage than forex. The same margin buys a much larger exposure, and the charge scales with the exposure rather than with the margin.
Can I receive financing on a short index position?
Yes, when the overnight benchmark for that currency exceeds the broker's markup. That has become common again as benchmark rates moved well above zero. It was rare during the near-zero-rate years, which is why many older guides state the opposite.
Do dividend adjustments make me money on a long position?
No. The credit offsets the drop in the index value on the ex-dividend date. It arrives as a separate line on the statement, which makes it look like income, but the position has lost an equivalent amount in mark-to-market at the same time.
Does a futures-based commodity CFD charge anything overnight?
Usually not, because the carrying cost is already priced into the futures contract. Instead you meet the cost at each roll, where the position is transferred to the next contract month with a cash adjustment.
