Advertise on ForxZen — put your brand in front of a global forex & CFD trading audience.Get in touch →

Overnight Financing Charge

Costs & Fees

The daily cost of holding a leveraged position past the cut-off, based on the notional value and prevailing interest rates.

An overnight financing charge is the cost of keeping a leveraged position open past the daily cut-off, reflecting the fact that the trader controls a notional value far larger than the margin posted. On CFDs over shares or indices it is typically calculated on the full notional at a benchmark interest rate plus or minus the broker's own adjustment, and debited daily while the position remains open; a short position may receive a credit instead when rates allow. In forex the same idea appears as the swap, priced from the interest-rate differential between the two currencies. Financing is charged for time rather than activity, so it barely affects intraday trading but compounds into a major cost for positions held for weeks or months.

Related terms

More in Costs & Fees

After Overnight Financing Charge