cost of CFD's

[#1]

Hi, could anyone help me understand the cost associated with CFD's More specifically, i) how the gap between the underlying share price and the CFD price is calculated? ii) does the cost differ depending if you are long or short? Thanks.

[SimonPB]

cfd's essentially trade at spot, transaction costs the same for long and short .. but with long you pay interest and with short you receive interest .. interest charged daily ..

[razputin]

Quite easy to calculate. CFD price is underlying share price x 1.0035. The brokerage is a separate charge at R50 (+Vat). The margin and brokerage is charged when buying and selling. If you sell on the same day that you buy, then the margin charged when you sell is reduced to 0.20% (from 0.35%).

[#4]

thanks

[StanleyB]

A word of caution - The interest charges are not included in the daily P/L of portfolio view. You nee to look at full derivatives report to see true position.

[#6]

Is the interest charged on the initial amount "borrowed" or is it calculated on the value of the holding each day?