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Holding positions long-term / High fees


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I'm relatively new to trading, so please forgive me if I just have the wrong idea about this. I'm learning as I go with the demo account and try to read through the tutorials and guides that IG provides. Maybe I'm just betting on the wrong horse, but any long term investments into positions that I want to hold over multiple days seem to get eaten up by broker fees.

I'm playing around with the demo account for a while now and tested most of the options on both accounts (barriers, indizes, fx, crypto, shares) and the biggest problem I have are the daily fees I have to pay. With the CFD account it seems to be mainly due to the lever where I have to pay interest for the money I borrowed, but there doesn't seem to be a way to only invest my own cash (without using a lever). Or maybe I don't fully understand how levers work yet.

The last thing I tried were barrier options and they looked pretty good fee wise. 0,10 cents for creating and ending a call, the knock out fee is low and there's an annual admin fee of 2,5% (2,5% of what?) as far as I could find. So I invested 140€ into Germany 30 Barrier Call, let it sit over night and bam, -0,91€ daily admin fee ... what?

That means after holding that position for 15 days without the market moving I've still lost 20% of my investment? Are the fees really just that high, or am I doing things wrong? It's a bit hard for me to decide whether to switch or not to switch to a live account because it's so hard to find solid information what the actual fees are that I will have to pay. I'm finding out by trial and error on the demo account. Don't get me wrong, there seem to be multiple sources where this information apparently can be found, but they are all missing some of it, so you have to read through all of them to get a good picture.

 

Since I'm currently trying to get into trading and learn the basics, maybe long-term positions are just generally a bad idea? I guess I'm a bit naive about the whole thing. 🙂

What would be the best option for me, if I wanted to just invest some money (~1k€), check the market every day or so and maybe sell a few days later? Would I just have to pick a market that moves fast enough to offset the fees?

Thanks!

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  • 3 weeks later...

@Nexuscrawler & @Hippocampus,

Hi, all 'daily funded bets' (DFB) also known as spots have a daily interest charge (or credit). The Futures or Forwards markets are designed for holding longer term and have a larger spread instead of the daily interest charge. If expecting to hold for less than a week the DFB is probably better, if longer than a week think futures. 

The swaps fees can only be worked out accurately at end of day but some estimates can bee seen for some markets on the platform, see

https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/fees-and-charges/why-is-overnight-funding-charged-and-how-is-it-calculated-

Options are probably best left til understanding of the general leveraged platforms (DFB and CFDs).  

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