Costs of trading FAQs

1. What is a spread?
2. What spreads does City Index charge?
3. How do I know what the spread is?
4. If I place a large trade will the spread increase?
5. Do you charge commission on trades?
6. How much commission do you charge on equity CFDs?
7. What is overnight financing and what does it apply to?
8. What time is the overnight financing fee applied?
9. What is the overnight financing fee on CFDs?
10. How are overnight financing fees calculated?
11. Overnight financing on hedging trades
12. Special borrowing costs
13. Corporate actions on dividends
14. Do you charge to make deposits into CFD trading accounts?
15. What is a back to base currency conversion?
16. Will I pay a fee if I don't use my CFD trading account?
17. Exchange data fees
18. Are there charges for placing orders?
19. How are overnight financing fees calculated for forex (FX)?
20. How are Italian CFDs taxed?
21. How does the tax apply for CFDs?

What is a spread?

When a price for a market is quoted, you will see two prices. The first price, known as the bid, is the sell price and the second price is the buy price, known as the offer. The spread is the difference between the sell and buy price. The tighter the spread, the less the market needs to move for you to start making a profit.

Learn more about CFD trading.

What spreads does City Index charge?

City Index offers both fixed and variable spreads, depending on the market you wish to trade.

Fixed spreads don't change according to market conditions such as volatility or liquidity. They may either be offered for a defined period of the day, or throughout specific trading hours. Spreads may be wider in less popular (and therefore less liquid) trading hours.

With variable spreads, when City Index lists a spread, we will quote you the minimum possible spread plus an average spread for a defined historical period of time.

How do I know what the spread is?

When you open an order ticket on our Web Trader platform or mobile trading apps, you’ll see the current spread listed between the buy and sell prices. The product pages on our website also detail spreads for all our popular instruments.

If I place a large trade will the spread increase?

The current spread that is shown for an instrument is good for the maximum trade size shown on the market information sheet for that specific instrument. Please note spreads may increase with larger size trades.

Do you charge commission on trades?

City Index does not charge any commissions on CFD or forex (FX) markets, with the exception of CFD equities.

How much commission do you charge on equity CFDs?

CFD equity commissions vary by market.  For example, the standard commission rate for Singapore equities is 0.08% of the consideration, subject to a minimum commission of SGD 10.

Details on the commission rates for each equity can be found within the Market Information sheets on the trading platforms.

What is overnight financing and what does it apply to?

Overnight financing is a fee that you pay to hold a trading position overnight on leveraged trades. Essentially it is an interest payment to cover the cost of the leverage that you use overnight.

Overnight financing is applied to positions that have no set expiry date, for example, trades for equity CFDs. As with our low commissions and tight spreads, these charges are competitive in order to keep your trading costs low.

You will not pay an overnight financing fee on futures trades as they already have the cost of carry built into the price.

There may be instances when a Daily overnight financing Fee is charged to you on short positions, rather than paid to you. This may occur if the relevant rate benchmark is at an exceptionally low rate.

What time is the overnight financing fee applied?

The daily overnight financing fee will be applied to your CFD trading account on each day that you hold an open position (including weekend days). Overnight financing is processed daily at 06:00 SGT, at which time any open positions will be rolled, and a debit or credit will be applied to your CFD trading account. We do not charge overnight financing fees on intraday trades.

Overnight financing fee is applied at 17:45 London time for the majority of our markets. For details of the exact times on all our markets, please view the market information sheet in the trading platform.

What is the overnight financing fee on CFDs?

The overnight financing rates are as follows.

How are overnight financing fees calculated?

Overnight financing fees for positions which remain open at our market close are calculated using the formula below (with the exception of FX positions, which are calculated using swap points - please see Q19 for further details):

• Short Positions F = V × I / b
• Long Positions F = V × I / b, where:

F = Daily overnight financing fee

V = Value of equivalent (quantity x end of day closing price)

I = Applicable overnight financing fee

b = Day basis for currency (365 for GBP, HKD and AUD, 360 for all other currencies)

The daily overnight financing fee will be applied to your CFD trading account each day that you hold an open position (including weekend days). The overnight financing rates are set at benchmark regional interest rate +/- 2.5%.

For example, say you are long £10 on the UK 100 and hold the position overnight. The UK 100 closes at 7000, and the SONIA rate for that day is 0.33.

F = V x I/b

V = £10 (quantity) x 7,000 (end of day closing price ) = 70,000

I = 0.33% + 2.5% = 2.83%

V x I = £70,000 x 2.83% = £1,981

F = £1,981 / 365 = £5.43 (overnight financing paid by you per day)

Overnight financing on hedging trades

If you have a hedged position open overnight, you will be charged overnight financing on both sides of the trade.

Special borrowing costs

If you hold a short position in an underlying equity where there are additional charges to borrow stock in the external market, we will reflect these charges in an overnight debit on your Account. These charges will fluctuate depending on market conditions and the scarcity of the stock concerned. Any such charges will be clearly highlighted on your Account statements and visible on your Account history.

Corporate actions on dividends

Your positions will also be subject to any applicable corporate actions or dividends. For more information please view the corporate actions section in trading orders and positions.

Do you charge to make deposits into CFD trading accounts?

Card deposits will incur a charge of 2% of the value of the deposit.

What is a back to base currency conversion?

With CFD trading accounts, the trade P&L will be in the currency of the instrument you trade.

For example you may have SGD as your base currency for your CFD trading account, but if you trade the Wall Street the profit and loss for that trade will be in USD. By trading a host of international instruments you would end up with balances that are comprised of multiple currencies.

City Index has a process called ‘Back to Base' which automatically converts any realised profits and losses, adjustments, fees and charges that are denominated in another currency, back to the base currency before applying them to your CFD trading account.

For example, If your base currency is Singapore dollars and you place a CFD trade on the Wall Street Index, as the Wall Street Index is a US dollar denominated market, your profits or losses, as well as any additional charges when applicable (such as commission, overnight financing, dividends, corporate actions etc.) will be denominated in US dollars. Back to Base (Currency Conversion) automatically converts these charges back to your nominated base currency, which in this example, would be Singapore dollars.

We will always apply commercially reasonable rates for Back to Base (Currency Conversions). Conversions and the rates applied will be disclosed on your contract notes and statements.

Will I pay a fee if I don't use my CFD trading account?

Where no activity has occurred on your CFD trading account(s) for a period of 24 months or more, your CFD trading account(s) will be deemed inactive. 'Activity' is defined as placing a trade and/or maintaining an open position during this period. Placing an order on a CFD trading account without executing a trade will not qualify as ‘Activity’ for these purposes. A monthly inactivity fee of $15 (or currency equivalent) in aggregate (or your cash balance if less than $15) will be applied for CFD trading accounts that are inactive for 24 months or more.

If your CFD trading account has been inactive for 2+ years, we'll need to reassess your trading experience and ensure that we have your up-to-date contact details. You will need to complete our account reactivation form and a member of our Account Management Team will be in touch to let you know if we need anything further from you or to let you know that your CFD trading account(s) have been reactivated.

Exchange data fees

Exchange data is the data that is fed into the trading platforms from exchanges or licensed distributors and is used to display market prices and movements. We do not charge our clients anything in return for this exchange data, and City Index clients also benefit from our price matching feature where we strive to match or improve upon the underlying exchange price.

Are there charges for placing orders?

There are no charges for placing standard orders such as stops and limit orders.

There is a charge for placing guaranteed stop loss orders (GSLO) upon execution. GSLOs are not available on all financial markets, and information on charges and available markets can be found within the markets information sheets on your trading platform.

Learn more about our risk management tools. 

How are overnight financing fees calculated for forex (FX)?

Should you hold a position overnight, there will be an overnight financing adjustment. We use swap points to calculate the daily overnight financing adjustment amount for currency pairs. Note that on positions held overnight on Wednesdays, three days are charged to cover overnight financing over the weekend.

We run an end-of-day process where all positions held open during that time will be debited/credited. Traders who hold long positions will be credited/debited by –1 x notional amount x swap points unit quote currency, while short positions will be debited/credited by notional amount x swap points in unit quote currency.

For EUR/USD, if swap rates were 0.817/1.28, on a long position of €10,000 you would be charged $1.28 to hold the position overnight.

If you were to sell EUR/USD for €10,000, you would receive $0.82 overnight. These amounts are then converted back into your base currency. 

Italian Financial Transaction Tax

How are Italian CFDs taxed?

Italian derivatives are subject to the Italian Financial Transaction Tax (IFTT), which came into effect on 3 September 2013.

This tax applies regardless of your place of residence or the place where your transactions have been concluded.

To comply with Italian law, we apply the tax to all CFD trades that have an Italian index or in-scope Italian share as their underlying market.

How does the tax apply for CFDs?

The tables below show how much tax you will be charged when trading each CFD product. The tax will be calculated on a trade basis. Any tax due will be charged to your CFD trading account after the execution of your trade.

Please note that these amounts are indicative only and may be subject to change. For the latest information about tax charges, please contact our client services team.

Indices trading 

You will be charged the IFTT according to the following table if you trade CFDs on the Italy 40. The tax charge will be based on the notional value of the trade. 

Share trading 

Only CFDs based on Italian shares with a market capitalisation above €500 M as set out by the Ministry of Finance in December 2012 are currently in scope and will be subject to the tax. This is subject to change by the Italian government. The tax charge will be based on the notional value of the trade.