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When you trade using margin, RBS Spread Trading is effectively loaning you money to cover the cost of your trading position.
Therefore as with all loans, RBS Spread Trading charges interest to cover the position for each night it is open. Financing is charged against the total value of your position. This charge is based on LIBOR (London Interbank Offered Rate) +/- 2.5% for UK stocks or the equivalent rate for the specific country of origin of each instrument. Since LIBOR is variable, the financing rate will also fluctuate.
In the case of FX, spot positions that are rolled over incur financing based upon the interest rate differential between the two applicable currencies. The interest rate applied is 'tomnext' which is an abbreviation for 'tomorrow' or the 'next' business day because the first value date is tomorrow or the next business day. The 'tomnext' price reflects the applicable interest rate between tomorrow/next and the 'spot value' date.
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