[Daily Commodities Interest that IG charge]

On 26/06/2020 at 01:04, furnessc said:

Could someone explain the outrageous Daily Commodities Interest that IG charge when one has a long position in Oil? I understand that in addition to the carry interest, the major element relates to a daily adjustment between the next two months future prices.

 

Having spoken to their support, I was told that these charges are a way of adjusting the price during the month. He went on to say that it was not really a net cost since we get it back in a lower margin on the basis that they would require a higher margin had they used an alternative approach.

 

This smacks of a scam as the margin is not a “cost” as such. More importantly we are for ever chasing a moving target as our purchase price is also inflated. So even if one is showing a profit, in fact after these charges one is making a huge loss.

Yes, I noticed the high daily overnight interest for Gas. It is so much higher than the Equities CFDs. My overnight Equities CFD was -$0.08 to Gas -$5.40. The notional value is just 4x the Equities.