InteractiveBrokers: How to calculate overnight commissions for CFD?
IB's overnight financing cost for US CFDs below $100,000 is the Benchmark Rate + 1.5% for long positions and the Benchmark Rate -1.5% for short positions. You can check the IB CFD Contract Interest for their full list of financing costs for share CFDs. IB's commissions  for an executed trade (where your monthly volume is below $300,000) is $0.005 per share with a minimum per order of $1.00. Commissions and overnight financing are 2 different fees, the overnight financing is charged because CFDs are leveraged. An order is just that, it is not a trade. It means your order has not been executed yet and is still an active order which you have not paid any commissions for yet. Regarding the orders that persist overnight, an example might be, you place an order to buy to open 200 CFDs. If only 100 CFDs are traded on that day, and the remaining 100 CFDs of your order remains active overnight, it will be considered a new order for the purposes of determining commission minimums. I have found a good explanation here: http://www.contracts-for-difference.com/Financing-charge.html Financing is calculated by taking the overall position size, and multiplying it by (LIBOR + say 2%) and then dividing by 365 x the amount of days the position is open. For instance, the interest rate applicable for overnight long positions may be 6% or 0.06. To calculate how much it would cost you to hold a long position for X number of days you would need to make this 'pro rata' meaning that you would need to divide the 0.06 by 365 and multiply it by X days and then multiply this by the trade size. So for example, for a trade size of $20,000, held for 30 days, the interest cost would be about $98.6. It is important to note that due to financing, long positions held for extended periods can reduce returns.
Now the question: is advisable for a beginner to speculate in CfDs?  No. If not, is there a better way to invest with a small amount of money? In the US, and I'm sure this carries to the UK, most (if not all) big brokerages (Schwab, TD Ameritrade, Fidelity, Vanguard, etc) have a set of funds that are zero load and zero commission though the fund will still have an expense ratio.  This is the Barclay's UK page related to zero cost investing in the Barclay's funds.  Barclay's might not be the right fit for a beginner as it seems there is a hefty account minimum, but the same zero commission concept exists in the UK.  Again, most of these brokerages will also have an extremely low expense ratio S&P index (or some other market index) fund.  As a beginner that's where you should start. This is not meant to patronize beginners, it's just math.  Assume your trade commission is £7.  If your investment is £100, you'll lose £7 right up front to the buy commission, then another £7 when you sell.  Lets say your position raises 10%, you'll be at a net loss of 4.7%. Meanwhile if you put your £100 in to a 0.1% expense fee mutual fund with no transaction commissions and no load fees, after a 10% gain you'd owe £0.11 due to the expense ratio at the of the year.  You'd have £109.89. Beginners get crushed by fees and commission.  It is not advisable, by any stretch of the imagination, to attempt to day trade or actively manage a portfolio of any sort of security; and commodities and currency are the WORST place to start. Something really does seem seedy that if I invest $2500, that I'll make above 50k if the stock doubles. Is it really that easy? You only buy or sell on margin. Think of when the stock moves in the opposite direction. You will loose 50k. You probably didn't look into that. Investment will vanish and then you will have debt to repay. Holding for long term in CFD accounts are charged per day. Charges depends on different service providers. CFD isn't and should not be used for long term. It is primarily for trading in the short term, maybe a week at the maximum. Have a look at the wikipedia entry and educate yourself. The SEC 30-Day Yield you're seeing is a standardized yield calculation set out by the Securities & Exchange Commission.  It can be useful for comparing bond funds, but it doesn't guarantee what you'll actually earn from a fund. IMPORTANT: The SEC 30-day yield represents a bond fund's returns from the previous 30 days expressed as an annual percentage of the current fund price — yes, an annual percentage. In other words, don't expect 1.81% return on your money every 30 days!  Such a return is too-good-to-be-true return in today's low rate environment.  1.81% per year?  More reasonable. Even then, the 1.81% you see is merely an estimate, one based on assumptions, of what you might expect to earn if you keep your money in place for the next year.  The estimate is based on the assumptions that: These aren't reliable assumptions.  BIV's price does fluctuate.  You are not promised to get your principal back with a bond fund.  Only an individual bond promises your principal back, and only at maturity. So, earning $181 on $10,000 invested for a full year while taking on interest-rate and other risks might not be worth the trouble of putting your money in a brokerage account. You'll need to transfer the money in and out, and there are potential trading fees to take into account.  (How much to buy/sell units?) An FDIC-insured high interest savings account makes more sense. A CFD broker will let you open a trade on margin as long as your account balance is more than the margin required on all your open trades. If the required margin increases within a certain percentage of your account balance, you will get a margin call. If you then don't deposit more funds or close losing trades out, the broker will close all your trades. Note: Your account balance is the remaining funds you have left to open new trades with. I always use stop loss orders with all my open trades, and because of this my broker reduces the amount of margin required on each trade. This allows me to have more open trades at the one time without increasing my funds. Effects of a Losing Trade on Margin Say I have an account balance of $2,000 and open a long trade in a share CFD of 1,000 CFDs with a share price of $10 and margin of 10%. The face value of the shares would be $10,000, but my initial margin would be $1,000 (10% of $10,000).  If I don't place a stop loss and the price falls to $9, I would have lost $1,000 and my remaining margin would now be $900 (10% of $9,000). So I would have $100 balance remaining in my account. I would probably receive a margin call to deposit more funds in or close out my trade. If I don't respond the broker will close out my position before my balance gets to $0. If instead I placed a stop loss at say $9.50, my initial margin might be reduced to $500. As the price drops to $9.60 I would have lost $400 and my remaining margin would now only be $100, with my account balance at $1,500. When the price drops to $9.50 I will get stopped out, my trade will be closed and I would have lost $500, with my account balance still at $1,500. Effects of a Winning Trade on Margin Say I have the same account balance as before and open the same trade but this time the price moves up. If I don't place a stop loss and the price goes up to $11, I would have made a $1,000 profit and my remaining margin will now be $1,100 (10% of $11,000). So my account balance would now be $2,000 + $1,000 - $1,100 = $1,900. If I had placed a stop loss at say $9.50 again and the price moves up to $10.50, I would have made a profit of $500 and my margin would now be $1,000. My account balance would be $2,000 + $500 - $1,000 = $1,500. However, if after the price went up to $10.50 I also moved my stop loss up to $10, then I would have $500 profit and only $500 margin. So my balance in this case would be $2,000 + $500 - $500 = $2,000. So by using stop losses as part of your risk management you can reduce the margin used from your balance which will allow you to open more trades without any extra funds deposited into your account. "Treat each position or partial position as a separate LOT. Each time you open a position, a new lot of shares is created. If you sell the whole position, then the lot is closed. Done. But if you sell a partial quantity, you need to create a new lot. Split the original lot into two. The quantities in each are the amount sold, and the amount remaining. If you were to then buy a few more shares, create a third lot. If you then sell the entire position, you'll be closing out all the remaining lots. This allows you to track each buy/sell pairing. For each lot, simply calculate return based on cost and proceeds. You can't derive an annualized number for ALL the lots as a group, because there's no common timeframe that they share. If you wish to calculate your return over time on the whole series of trades, consider using TWIRR. It treats these positions, plus the cash they represent, as a whole portfolio. See my post in this thread: How can I calculate a ""running"" return using XIRR in a spreadsheet?" "To keep it simple, let's say that A shares trade at 500 on average between April 2nd 2014 and April 1st 2015 (one year anniversary), then if C shares trade on average: The payment will be made either in cash or in shares within 90 days. The difficulties come from the fact that the formula is based on an average price over a year, which is not directly tradable, and that the spread is only covered between 1% and 5%. In practice, it is unlikely that the market will attribute a large premium to voting shares considering that Page&Brin keep the majority and any discount of Cs vs As above 2-3% (to include cost of trading + borrowing) will probably trigger some arbitrage which will prevent it to extend too much. But there is no guarantee. FYI here is what the spread has looked like since April 3rd:  * details in the section called ""Class C Settlement Agreement"" in the S-3 filing" I’m going to answer this because: Accounting books only reflect the dollar value of inventories. Which means if you look at the balance sheet of McDonalds, you will not see how many bags of French fries are remaining at their storage facility, you will only see the total value at cost basis.  Your requirement for noting the number of shares purchased is not part of the double entry accounting system.  When you transfer $10000 from bank to broker, the entries would be:  The bank’s name and the broker’s name will not appear on the balance sheet.  When you purchase 50 shares at $40 per share, the accounting system does not care about the number of shares or the price. All it cares is the $2000 total cost and the commission of $10.  You have two choices, either place $10 to an expense account, or incorporate it into the total cost (making it $2010).  The entries for the second method would be: Now your balance sheet would reflect: What happens if the price increases from $40 per share to $50 per share tomorrow? Do nothing. Your balance sheet will show the cost of $2010 until the shares are sold or the accounting period ends. It will not show the market value of $2500.  Instead, the Portfolio Tracker would show $2500. The most basic tracker is https://www.google.com/finance/portfolio .  Later if you finally sell the shares at $50 per share with $10 commission: Again, the number of shares will not be reflected anywhere in the accounting system. Only the total proceeds from the sale matters. "My Broker and probably many Brokers provide this information in a table format under ""Course of Sale"". It provides the time, price and volume of each trade on that day. You could also view this data on a chart in some charting programs. Just set the interval to ""Tick by Tick"" and look at the volume. ""Tick by Tick"" will basically place a mark for every trade that is taken and then the volume will tell you the size of that trade."