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Daily Commodities Interest for 1 day Live Cattle (A$1)


h7

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Hey Girls and Guys,

Hope you are all well.

Could someone help me in understanding the positive carry for a live cattle trade.

I'm long live cattle ( just 2 contracts) and I receive about $13.00 a day credit as a positive carry.

I just need to know the details for my own education.

Thanks in advance.

 

H

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Hey,

 

I'm also trying to comprehend exactly how the interest/swap is calculated. IG's rate is 2.5%. for long positions the LIBOR seems to be added to that and for short it's subtracted. In FX the second currency interest rate is subtracted from the first of the pair. I have negative interest on all my shares but positive interest (+£1) on bitcoin short. What's bitcoin's interest rate, it's not 57% that google suggests, is it?

 

LIBOr seems to be at 2.5% at present. Does each share/currency/etc have its own interest rate? Such as your 2 cattle contracts:)

 

It's a slightly confusing subject...

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Cryptocurrencies, regular FX pairs, and commodities are calculated differently for their over night fundings. I've given a rough break down below, but please let me know if you have any questions. 

 

FX: A tom-next rather than an interbank rate is used in the calculation of funding costs for forex and spot metals. Tom-next is the day’s market swap rate for that pair or metal. We get this from the underlying market, apply the IG administrative cost by increasing the spread slightly, and giving an all in funding rate on that swap. 

 

Commodities: In the underlying market commodities trade in futures. The undated futures offer we have will ratio out your trade between the front month and next most liquid contract, and slowly move you up the futures curve as you get closer to expiry. You can read more about how we make our prices here. If you are receiving or paying will therefore be based on the direction of the futures curve (up or down) when the IG charges have also been taken into account.

 

Cryptocurrencies: We price off the underlying spot market, however there are additional charges associated with holding crypto in the secure fashion we do. There is also a leverage aspect which needs to be taken into consideration, as you are borrowing 65% of the cash required to maintain the position (assuming Margin requirements are 35%). Our daily overnight funding rate is currently 0.034% for bitcoin.

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    • Hi @greenscorpio1000 Thanks for reaching out.  You can use the platform to check how much the daily charge would be. You can add the Swap bid (Rate used to calculate your overnight funding) on the platform by searching Cocoa- London >> Right click on it and add to Watchlist >> Add the Watchlist to your Workspace.  Once this is done, click on the three lines next to 'Market' on the top left and add Swap bid/Swap offer to view the expected daily rate. You simply take this rate and multiply it by your size to estimate the daily interest payment on your account.  Overnight Funding = Bet Size x Rate  Negative number is a charge Positive Number is a credit Using an example with the figures shown in the above screenshot, if you are short London Cocoa with  bet size GBP2, your overnight funding will be GBP2 x -2.36 = -GBP 4.72 charge We have an example on How we calculate Overnight Funding for Commodities on our website. This will give you a clear indication if this will be a credit or a debit in your account.  All the best, OfentseIG    
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