Capital.com has reduced overnight financing costs for traders using its hedging mode, lowering the administration fee applied to offsetting long and short CFD positions in a move that could make more advanced trading strategies cheaper to maintain.
The update changes how the administration fee component of CFD overnight funding adjustments is calculated for clients who hold opposing positions on the same financial instrument. Previously, the fee was charged on the total gross exposure across all open positions, regardless of whether those trades partially or fully offset each other.
Under the new methodology, Capital.com aggregates positions by direction and applies the administration fee only to the larger side of the hedge. The underlying swap rate calculation remains unchanged and continues to be applied to each individual position.
The change means CFD traders who actively use hedging strategies will see lower overnight costs, particularly those maintaining balanced long and short positions. According to Capital.com, clients with fully hedged positions – where long and short exposure is equal – can expect overnight administration fees to fall by around 50%.
The spread betting broker illustrated the new calculation with an example of a trader holding six long positions totalling 28 units and three short positions totalling 13 units. Previously, the administration fee would have been charged on the full 41-unit gross exposure. Under the revised approach, it is calculated only on the 28-unit long side, reducing the financing cost while leaving the swap rate calculation unchanged.
The revised fee structure applies automatically to Capital.com trading accounts and requires no action from clients. The broker said the changes do not affect traders who do not use hedging mode or those whose positions all run in the same direction. MT4 accounts are also excluded from the update.
Our View
Overnight funding on long-term CFD positions is one of the highest costs of trading CFDs and often overlooked by traders. So, this is good news for experienced CFD traders who use hedging to manage market exposure during periods of heightened volatility or while holding positions around major economic events. By reducing the cost of maintaining offsetting positions overnight, Capital.com is making sophisticated risk-management strategies more cost-effective without altering the underlying mechanics of its financing model.
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