Costs of trading FAQs
- What is a spread?
- What spreads does City Index charge?
- How do I know what the spread is?
- If I place a large trade will the spread increase?
- Do you charge commission on trades?
- How much commission do you charge on equity CFDs?
- Will I pay Capital Gains Tax on trading profits?
- Will I pay stamp duty?
- What are financing charges and what do they apply to?
- What time is financing applied?
- What is the financing charge for spread bets and CFDs?
- How are finance rates calculated?
- Financing on hedging trades
- Special borrowing costs
- Do you charge to make deposits into your account?
- Do you charge to make withdrawals from your trading account?
- What is a back to base currency conversion?
- Will I pay a fee if I don't use my account?
- Exchange data fees
- Are there charges for placing orders?
- How does the Italian Financial Transaction Tax affect my trade?
- Financing on non-expiring contract markets
- How are overnight FX financing charges calculated?
What is a spread?
A spread is the difference between the buy and sell prices you'll see quoted for any market. It covers the cost you'll pay to open and close a leveraged trade.
When a price for a market is quoted, you will actually 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 in order for you to start making a profit.
Learn more about spread betting and 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.
For example, the UK 100 has a fixed spread of 1 point between 8-4.30pm. Outside of these hours, the spread will widen to other fixed amounts. See Indices for details.
Variable spreads may fluctuate throughout the day according to different factors such as underlying liquidity or market volatility. With variable spreads, when City Index lists a spread we will quote you the minimum spread it could be, plus an average spread for a defined historical period of time.
Learn more about the costs of spread betting.
How do I know what the spread is?
When you open an order ticket on our Web Trader platform or mobile 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 of 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 additional commissions on spread bet markets.
City Index also does not charge any commissions on CFD or FX markets, with the exception of equity CFDs – also referred to as share CFD.
How much commission do you charge on equity CFDs?
Equity CFD commissions vary by market. For UK and most European equities the charge is 0.08% of the consideration and, for most US equities it is 1.8 cents per share. Our minimum commission rates are £10, $10 or €10 respectively.
Details on the commission rates for each equity can be found within the Market Information sheets on the Web Trader platform or our mobile apps.
Learn more about our share CFDs.
Will I pay Capital Gains Tax on trading profits?
Spread betting is exempt from UK Capital Gains Tax.
Please note that tax laws are subject to change and we recommend that you seek independent investment advice.
Will I pay stamp duty?
Spread betting is exempt from UK stamp duty.
CFD trading is also exempt from UK stamp duty unless you are trading Irish stocks. There is a 1% stamp duty charge for these; however this will be refunded if you hold the position for less than 30 days.
Please note that tax laws are subject to change and we recommend that you seek independent investment advice.
What are financing charges and what do they apply to?
Financing is a fee that you pay to hold a trading position overnight on most spread bet or CFD trades. Essentially, it is an interest payment to cover the cost of the leverage that you use overnight.
Overnight financing charges are applied to positions that have no set expiry date, for both spread betting and 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 a finance charge on futures trades as they already have the cost of carry built into the price.
There may be instances when a daily 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 financing applied?
The daily financing fee will be applied to your account each day that you hold an open position (including weekend days).
Financing is usually applied after 22:00 (GMT) for most markets. To see the exact time for a market, view its information sheet in the Web Trader platform. For details of the exact times for all our available markets, please view the market information sheet on the Web Trader platform.
What is the financing charge for spread bets and CFDs?
The financing rates are:
|Country||Financing on long positions||Financing on short positions|
|UK||SONIA +2.5%||SONIA -2.5%|
|US||SOFR +2.5%||SOFR -2.5%|
|EU||€STR +2.5%||€STR -2.5%|
|Australia||Deposit +2.5%||Deposit -2.5%|
|Other international||Contact customer support||Contact customer support|
How are finance rates calculated?
Financing charges for positions which remain open at our market close are calculated using the following formula:
- Short Positions F = V × I / b
- Long Positions F = V × I / b, where:
F = Daily financing fee
V = Value of equivalent (quantity x end of day closing price)
I = Applicable financing rate
b = Day basis for currency (365 for GBP, HKD and AUD, 360 for all other currencies)
The daily financing fee will be applied to your account each day that you hold an open position (including weekend days). The 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 6,500, and the SONIA rate for that day is 0.33.
F = V x I/b
V = 10 (quantity) x 6500 (end of day closing price ) = 65,000
I = 0.33 + 2.5% = 2.88%
V x I = 65,000 x 2.88% = 1872
F = 1872 / 365 = £5.12 (financing paid by you per day)
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
Special borrowing costs are incurred when our brokers charge an inflated borrowing fee, usually due to lack of liquidity. Customers will receive a notification from our trade desk if they trade a market with a borrowing cost.
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 your account?
Debit card and credit card deposits and transfers do not incur any charges.
Do you charge to make withdrawals from your trading account?
No, we do not make charges to withdraw money to your credit, debit card or a bank transfer using BACS.
What is a back to base currency conversion?
Back to base currency conversion is a process that automatically changes any profit and loss (P&L) and other charges that are denominated in another currency into the base currency of your account before applying them.
With CFD trading accounts, the P&L and any other charges will be denominated in the currency of the instrument. So, when trading a host of international instruments, you'd end up with costs in multiple currencies. Back to base allows you to see all your charges in one currency for ease of understanding.
For example, you may have GBP as your base currency for your CFD account, but if you trade the Wall Street index the P&L for that trade will be in USD. City Index’s back to base automatically converts it back to GBP.
We will always apply commercially reasonable rates for back to base currency conversions (which may be up to and including +/- 0.5% away from our quoted prices or rates from time to time). Conversions and the rates applied will be disclosed on your contract notes and statements.
Spread betting accounts are not affected because all trades take place in one base currency, usually sterling.
Will I pay a fee if I don't use my account?
If there has been no trading activity within 12 months, we do charge an inactivity fee of £12 per month until we do see trading activity or there are no funds in the account.
If the account has a balance less than £12, the remaining balance will be charged as the inactivity fee, not the full £12. Additional fees will not be charged if the account has no funds.
Retail accounts will automatically be suspended if there has been no trading activity for 36 months. For Professional Accounts, it will automatically be suspended if there has been no trading activity for 12 months. However, after the account is suspended, inactivity fees will still be charged.
To avoid being charged inactivity fees, you can withdraw your funds if you do not plan on using your trading account; otherwise, placing a trade will reset your inactivity period.
Activity like platform logins, orders, deposits, and withdrawals will not count as ‘trading activity’, for the purpose of making a client exempt from inactivity fees.
After the account is suspended, you will need to complete the account reactivation form.
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 limits.
There is a charge for placing guaranteed stop loss orders upon execution. GSLOs are not available on all markets, and information on charges and available markets can be found within the markets information sheets on your platform.
Learn more about our risk management tools.
How does the Italian Financial Transaction Tax affect my trade?
City Index complies with Italian law and we apply the Italian Financial Transaction Tax to all CFD trades on Italian Indices and Italian Equities where relevant. For more information on how this could affect your trading, please contact our customer support team.
Financing on non-expiring contract markets
Non-expiring commodity markets are subject to overnight financing on positions held overnight. See our pricing pages for further information.
How are overnight FX financing charges calculated?
Overnight FX financing charges are calculated using swap points. We run an end-of-day process where all positions held open during that time will be debited/credited. Clients 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.
Should you hold a position overnight, there will be an overnight financing adjustment. Note that on positions held overnight on Wednesdays, three days are charged to cover financing over the weekend.