CFD Trading Conditions

• Order Types: CFDs support all order types.
   
• Market Hours: CFDs are traded according to the exchange hours of the underlying instrument. See the specific instrument for more details.
   
• Spreads: CFD spreads are based on the exchange spreads of the underlying instrument. Spreads are dynamic and may change according to market conditions.
   
• Currency Conversion:With regard to instruments that are quoted in non-U.S. dollars: their profit or loss (P/L) and pip value will be converted to U.S. dollars immediately and online. For example, a profit of 20.0 points made by trading 100 lots of the DAX30 will immediately be converted into U.S. dollars according to the present EUR/USD rate.

• Overnight Rollover: CFD Positions left open overnight incur a charge or receive a credit against the size of the position based on the Markets.com Financing Charge and the Interest Rate Differential between the underlying product and the currency in which it is traded.

  Please Note: the MT4 platform calculates overnight rollover at 21:00 GMT and the rollover charge/credit is debited or credited to and from the trading account. On Wednesday at 21:00 GMT, overnight rollover fees are multiplied by three (x3) in order to compensate for the upcoming weekend.

• Interest Rate Differential is the difference in the interest rate between the product one is trading and the currency in which the product is denominated.

How to calculate overnight rollover

• Formula: (Interest Rate Differential – Financing Charge)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.

The Markets.com Financing Charge is 0.50% on fx pairs and 2.5% on CFDs

The size of the position is measured in units per 1 lot, e.g. 10 barrels = 1 lot of Crude Oil. Each CFD also has a base value determined by Markets.com. If the CFD is priced in a currency other than USD, an exchange rate determined by Markets.com is used to calculate the rollover in USD.

The overnight rollover values for a particular CFD can be seen in the Instruments window on the trading platform.

Rollover values will differ depending on whether the position held is short or long. All rollover values are per single lot and the final rollover charge or credit will be for the total amount of lots held in a position.

Example of the Crude Oil CFD Overnight Rollover Calculation:

Crude Oil Base Value is $77.40.
U.S. Federal Reserve Interest rate: 0.25%
Markets.com Financing Charge: 2.5%

The CFD Overnight Rollover Formula:
(Interest Rate Differential – Financing Charge)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.

A long position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.06 overnight, based on the following calculation:

- 0.25% - 2.5% = -2.75%
-2.75%/36000 x $77.40 x 10 = -$0.06

A short position of 1 Lot (10 barrels) in the Crude Oil CFD will be charged -$0.05 overnight, based on the following calculation:

0.25% - 2.5% = -2.25%
-2.25%/36000 x $77.40 * 10 = -$0.05

Thus a short position of 10 lots in Crude Oil would be charged -$0.50 overnight:
10 x -$0.05 = - $0.50.

Example of the FTSE 100 CFD Overnight Rollover Calculation:

FTSE 100 Base Value is £4970.
Bank of England Interest rate: 0.50%
Markets.com Financing Charge: 2.5%
GBPUSD Exchange Rate: 1.6320

The CFD Overnight Rollover Formula:
(Interest Rate Differential – Financing Charge)/36000 x Base Value x Units per Lot x Relevant Exchange Rate.

A long position of 1 Lot (1 unit) in the FTSE 100 CFD will be charged -$0.68 overnight, based on the following calculation:

-0.50% - 2.5% = -3.0%
-3.0%/36000 x £4970 x 1 x 1.6320 = -$0.68

A short position of 1 Lot (1 unit) in the FTSE 100 CFD will be charged -$0.45 overnight, based on the following calculation:

0.50% - 2.5% = -2.0%
-2.0%/36000 x £4970 x 1 x 1.6320 = -$0.45

A short position of 20 lots in the FTSE 100 would be charged -$9.0 overnight: 20 x -$0.45 = - $9.0.

Expiration of underlying instrument: Unless otherwise specified, the underlying instrument of a CFD has an expiration date. However, you should be aware that CFDs are not traded up until the exact expiration date of the underlying instrument. Instead, CFDs are rolled over to the next underlying Future Price during the last weekend (before the official expiration day). This is known as the expiration rollover. If there would be any substantial price difference between the two Futures, an adjustment will be Credited or Debited from the balance of your account (subject to the open position amount of the expiring CFD).

This Adjustment will show up in your account under Rollover Charge and will not affect the real value of your Equity. However, you should be aware that the switch between the two Future prices of the underlying CFD could involve a substantial price difference. Therefore, Entry Orders might be filled on Market rates rather then on the predefined rates. If you do not want to incur the price adjustment or any implication of the underlying CFD rollover, you can close your position(s) and/or cancel Orders before the rollover date and open a new position afterwards. Markets.com, at its best effort, will inform customers about any projected expiration of instruments by Popup, email or through the site.

Expiration of a CFD on the MT4 platform: The future contract on which a CFD is based has an expiration date, and clients will be able to close their CFD positions until this date. Positions not closed by clients by this date will be closed by Markets.com at the last available price. Approximately 3-5 days before expiring, a new CFD based on the next future contract will begin trading. During this period, no new positions can be opened in the old CFD contract.

Margin Requirement: All CFD positions carry margin requirements between 2% and 5% (depending on the individual CFD). You are required to keep funds in your account as collateral for the transaction amount of each CFD.

The margin requirement must be maintained to keep your position open. Should the equity value of the account drop below the minimum margin requirement, additional funds must be added.

Margin Calls:

• Customers will get an automatic margin call notification when logged into the trading platform if the Equity should, at any time, equal or fall below 100% of the Used Margin. Markets.com – at its best effort – will notify the customer about the breach of Equity below minimum margin requirements by phone call, email, SMS or popup in the Markets.com trading platform.
• If the Equity should, at any time, equal or fall below 20% of the Used Margin for a customer’s account in the aggregate, Markets.com will liquidate any part of, or all of the Open Positions in a customer’s account. Closure of positions will be done on the basis of best execution prices available to Markets.com at that time.
• Customers are responsible for placing their own Stop Loss Orders to minimize losses.
• In addition, Markets.com may, from time to time and at our best effort, contact a customer and request that said customer will deposit additional Collateral to secure his or her obligations. Any call for additional margin shall not be deemed precedent for future call nor future waiver of liquidation rights by Markets.com.