Financing costs for OANDA Europe Limited

Refer to our detailed webpage on financing costs. The page also answers the following questions:

• How are financing costs affected by settlements in the underlying asset and the impact of weekends and public holidays?

• Why are financing costs applied to your account?

• How do financing cost calculations differ for long and short positions?

• What are the daily funding rates and associated anticipated daily financing costs?

In the ‘Daily financing cost’ section of the financing costs page, you can select the instrument you want to trade and the date of reference. The widget will display both the annualised funding rate (including the specific admin fee) and anticipated daily financing cost based on prevailing rates. Additionally, you can also see historic funding rates.

Daily financing charge or credit = size of position x applicable funding rate x [trade duration (in days) / 365] x conversion rate to account currency

In the hypothetical example below, we assume the following funding rates (sample rates that don’t reflect the current swap rates):

The resulting financing cost will vary based on factors explained in the following scenarios:

• Scenario 1: You open a long 100,000 EUR/USD trade at 8:30am ET Wednesday and close it at 3:30pm ET Wednesday. There will be no financing cost because no open position is held at 5pm ET end of day.

• Scenario 2: You open a long 130,000 EUR/USD trade which remains open after 5pm ET Tuesday. The daily financing cost = 130,000 x -3.00% x 1/365 = -10.68 EUR. Thus, a financing charge of 10.68 EUR, converted to your account home currency, is levied on your account. Your account will be charged every day the position is held beyond 5pm ET.

• Scenario 3: You are short 130,000 EUR/USD trade which remains open after 5pm ET Wednesday. The daily financing for this position is 130,000 x 1.6% x 1/365 = 5.70 EUR. However, as this position is held past 5pm ET Wednesday, weekend financing will apply. The total credit received will be for 3 days i.e. 5.70 x 3 = 17.10 EUR. A financing credit of 17.10 EUR, converted to your account home currency, will be applied to the account.

Daily financing charge or credit = value of position* x applicable funding rate x [trade duration (in days) / 365] x conversion rate to account currency; where *value of position = size of position x price at the end of trading day (5pm ET)

In the hypothetical example below, we assume the following prices and funding rates (sample values that don’t reflect the prevailing reference rates):

The resulting financing cost will vary based on factors explained in the following scenarios:

• Scenario 1: You are long 1 unit of US SPX 500 (S&P 500) trade that remains open after 5pm ET Tuesday. Financing cost = (1 x 3040.50) x 4.00% x 1/365 = 0.33 USD. Thus, a financing charge of 0.33 USD, converted to your account home currency, will be levied to your account. This cost will be charged every day the position remains open after 5pm ET.

• Scenario 2: You are short 10 units of US SPX 500 trade that remains open after 5pm ET Friday. Financing cost = (10 x 3040.42) x 2.00% x 1/365 = 1.66 USD. However, as this position is held past 5pm ET Friday, weekend financing will apply. The total credit received will be for 3 days i.e. 1.66 x 3 = 5 USD. A financing credit of 5.00 USD, converted to your account home currency, will be applied to your account.

Financing charge or credit = position size x funding rate x [trade duration (in days) / 365] x conversion rate to account currency

In the hypothetical example below, we assume the following funding rates (sample values that don’t reflect the current basis rates):

The resulting financing cost will vary based on factors explained in the following scenarios:

• Scenario 1: You have a 100-unit long position of Brent Crude Oil, which was opened between 3:00am and 3:00pm ET. Financing cost = 100 x (5.00% + 2.50%) x (0.5 / 365) x 63.00 = 0.65 USD. Thus, a financing charge of 0.65 USD will be applied to your account. In this example, the charge offsets the trading profit that results from the price trending upward towards the next contract price (indicated by the +5% basis rate).

• Scenario 2: You have a 400-unit short position of Brent Crude Oil, which was opened between 9:00am ET and 3:00pm ET. Financing credit = 400 x (5.00% - 2.50%) x 0.25 / 365 x 63.00 = 0.43 USD. Thus, a financing credit of 0.43 USD will be applied to your account. In this example, the credit offsets the trading loss that results from the price trending upward.

• Scenario 3: You have a 100,000-unit long position of Natural Gas, which was opened between 2:00am ET and 2:00pm ET. Financing amount = 100,000 x (-20.00% + 2.50%) x (0.5 / 365) x 2.50 = -59.93 EUR. Since the resulting amount to be debited is negative, a financing credit of 59.93 EUR will be applied to your account. In this example, the credit offsets the trading loss that results from the price tending downward (indicated by the -20% basis rate).

Daily financing charge or credit = value of position* x applicable funding rate x [trade duration (in days) / 365] x conversion rate to account currency; where *value of position = size of position x price at the end of trading day (5pm ET)

The resulting financing cost will vary based on factors explained in the following scenarios:

• Example 1: You have 100 units of Adidas Share CFDs; it’s a long trade open at 5pm ET Tuesday. Financing cost = (100 x €184.94) x -2.42% x 1/365 = -€1.2261. A financing charge of €1.2261, converted to your account home currency, will be applied to your account.

• Example 2: You have 100 units of Adidas Share CFDs; it’s a short trade open at 5pm ET Friday. Financing cost = (100 x €184.90) x -3.58% x 3/365 = -€5.4406. A financing charge of €5.4406, converted to your account home currency, will be levied to your account.