What is interest on overnight positions and how does it work?
CFDs are a leveraged product requiring a deposit of cash Collateral rather than the full value of the underlying position. Effectively cash is being borrowed by the long counterparty and lent by the short counterparty. As a result, if an investor holds a long CFD position overnight, the investor will be charged interest on the CFD Value of that open position. Conversely, if an investor holds a short CFD position overnight, the investor will receive interest on the CFD Value of that position. This interest is calculated and paid each business day.
