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Overnight funding


Demoni1

Question

I understand it is:  (trade size * market closing price) * (2.5% + Libor/365)

For example, the Dow Jones with a $2 CFD and assuming the LIBOR rate is 0.7% :

(2 * 25100) * (2.5%+0.7%/365)

 

Am I correct in saying that 2.5% + 0.7% is written in this equation as 0.032 to represent 3.2% like so:
(2 * 25100) * (0.032/365)

 

Or is it meant to be:

(2 * 25100) * (3.2/365)?
 

 

It's the difference between $4.47 and $447 - I just want to double check I got this right, even if >$400 seems obscenely high.

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