Jump to content
  • 0

Market underlying currency



7 answers to this question

Recommended Posts

  • 0

H @JamesIG, thank you for your reply. I indeed am referring to overnight funding costs and can't figure out how it is being calculated for Indices and Commodities.

Say I'm shorting Nickel, Platinum and No Lead Gasoline. I'm being credited for holding Platinum and Nickel positions but being charged (a lot!) for holding the Gasoline positions.


I was referred to this page by support that would suggest I should be credited if I have short positions though it isn't so. Any help to figure out the right formula would be appreciated.


Best regards,


Link to comment
  • 0

Hi @RichardSmith,  the linked example in the comm page is correct but not well explained.

There is one calc for fx and spot metals, and then another calc for all other assets, see this page;


Note that the 'IG rate'  (IG commission +/-  interbank rate) is different for GBP or USD based assets, and is plus or minus for long or short.

Use the approp boxed 'IG rate' to replace the (2.5% +/- Libor)  in the calc below for indices and commodity markets, (the interbank rate has not changed much).

For Long;


For Short;


So for a long Dow trade it's 5.02% and for a short Dow trade it's -0.02%.


So for long Dow;

Size x Closing price x 5.02% / 365



Edited by Caseynotes
  • Like 1
Link to comment
  • 0

Thank you for your reply @Caseynotes. I sort of understand how it works for FX and spot metals and read the article you're referring to though what I don't understand is how the overnight charges are being calculated for Commodities. I may be repeating myself here but say why am I being charged for holding a short Gasoline position while being credited for holding a short Nickel position.

I found two topics that come close to the answer, what I'm looking for is a formula say with a current Gasoline price example or a table that @JamesIG shared in the second topic



Link to comment
  • 0

@RichardSmith, yes, you are right some of the commodity funding charges are a hand full, my example was based on indices.

The charge isn't automatically debit for longs and credit for shorts though, if you look at the pic you posted just above the longs (blue column) can be either plus or minus, same for the shorts (red column). I believe this is because the commods have the futures factor incorporated into the calculation and the front futures price may be more or less than the next futures price so you may end up with a positive or negative number for the (P3 - P2) part of the calc as in the link you posted above. So the final result for either a long or a short could work out to be positive or negative.


Link to comment
  • 0

You're right! It's certainly not an easy calculation, however what we've done here is create a continually traded assets on something which is usually only future traded. Without this every month your position would have to close, roll into the next future, and then open again. 

The reason for the financial gain or debit is down to the way the futures curve is positioned. Some assets get more expensive the further out in time you go, whilst others get cheaper. In other words some assets are more expensive the further out you go (for example oil which suggests people are more willing to pay a little more to have oil delivered in the future - that can be due to expected increase in demand over summer maybe, the fact there is a cost to hold oil in tankers etc, or a number of other things), whilst others are cheaper (for example some soft commodities which may devalue the further out you go). This can be down to a number of things, but primarily the demand for delivery at that point and time. 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 10/06/23 09:22
  • Posts

    • Why isn't there a way to set options stop loss on IG platform?  Are you planning to implement this feature?
    • Hi,  I started trading Brent Crude Oil in IG platform but I could find a formula to correctly calculate the size I have to put while creating a position, based on the available amount I have. The quotation is based in points and it makes me wonder how operate. Any help is welcome.  Also, I plan to work with some leverage in the future, so any tip on this matter is also welcome.  Thanks.  
    • Greetings fellow traders, I am thrilled to share an exciting intraday trading idea for EURAUD that could potentially boost your profits. At Gold Signals by Professor, we have conducted a thorough technical analysis and confidently recommend a Buy position for traders like you. Our analysis indicates a significant development: EURAUD has managed to sustain itself above the crucial level of 1.60927. This breakthrough suggests a positive momentum, with potential targets at 1.61500 and 1.61800. To mitigate risks, we advise setting a stop loss around 1.60375. In order to maximize your trading success, it is vital to stay well-informed about the latest news and events that may impact the FX market. Factors such as global economic conditions, geopolitical tensions, and central bank policies can influence the price movements of EURAUD. Please note that the momentum of the trade can be influenced by unforeseen events or news. Therefore, we will be updating this level regularly in our channel to ensure you have access to the most recent trends and analysis of Gold and its trading potential. Wishing you all a prosperous day filled with successful trades!
  • Create New...