Financing
How are financing adjustments calculated?
If you carry a position on a trade overnight, we will charge you ‘financing costs’. Finance will be calculated on 100% of the value of the equivalent physical position. If you are long, you’ll have to pay interest to RBS Spread Trading if you are short, you may receive interest.
The value of the adjustment will represent one night's cost of borrowing the notional value of your contract.
The adjustment is calculated using the London Inter-Bank Offered Rate (LIBOR) +2.5 % for long positions and -2.5% for Short positions. For instruments denominated in other currencies, the relevant overnight inter-bank financing rate will be used.
The statement shows a position after trading of 20 Long Vodafone Rolling Cash at a close price of £1.355 resulting in a notional position value of 2000 x £1.355 = £2,710. This is the figure on which financing is charged.
The LIBOR rate on this day was 5.0206%. Financing is charged at LIBOR + 2.5% = 7.3206%
The calculation for this days financing charge is therefore: (£2,710 x 7.5206%) / 365 = £0.55838
This charge will appear on you next days statement.. A £20 per point position would lead to a point adjustment of 0.55838 / 20 = 0.02792
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