CFD Commission & Financing
Commission
We do not charge any commission on trading CFD’s. The price you see is the price you get1. We make our money from the spread, which is the difference between the Buy price and the Sell price. We endeavour at all times to keep this spread as narrow as we can and our price reflects the price in the market and the liquidity available.
There will be times that our price is actually narrower than the underlying market that the price is based on, for example in Oil or Gold. This is of benefit to clients as even in times of extreme volatility in the market they know what our spread will be.
Financing
All rolling CFD markets are subject to overnight financing. If you are long CFD’s (ie you have a position on which you will profit if the market concerned goes up) then as you have only put up a fraction of the actual value of the trade then you have ‘effectively borrowed’ the balance. For this we charge a financing charge of 2% above the overnight borrowing rate for the currency concerned.
If you had gone short on CFD’s (ie you have a position on which you will profit if the market concerned goes down) then you have effectively deposited the entire value of the trade with us and will receive financing which is the overnight lending rate minus 2% (subject to a minimum of 0%).
Other competitors of ours use financing as a ‘stealth’ way of charging their clients additional premiums without them necessarily realising. This is something you should always look into, in whatever market you trade in. We at GKFX pride ourselves on being honest, clear and fair with our clients about what and why financing is charged.
As mentioned we only charge 2% above the overnight borrowing rate for our financing while some of our competitors charge up to 4%. But if you had sold a CFD you should normally receive financing for the reasons stated above. However when interest rates are low, for example 1%, some of our competitors actually charge you financing for being short, effectively for example charging you minus 2%.
In our opinion this is wrong, underhand and unfair. We at GKFX do not charge you financing for being short CFD’s, and as such have a minimum base of 0% financing for being short2.
1Tax laws can change and will vary in jurisdictions outside the UK
2Subject to Our Terms of Business.
