Quotes Costs and Cash Flows · CFDs Trading Guide

The advertised spread is only one line in a trading budget. Reconcile every cash entry to understand what a successful price move actually earned.

Create a complete cost ledger

Separate the price result from explicit commissions, funding, borrowing charges, conversion fees and other applicable charges. Some markets use a spread inclusive price, others add commission. Minimum commissions can dominate very small trades. Data subscriptions or inactivity charges belong in account performance even when they cannot be assigned neatly to one position.

Avoid counting the same charge twice

A result computed from actual buy and sell fills already reflects the spread. A model computed from midpoint prices needs a spread allowance. These are alternative accounting approaches. Mixing them overstates costs. Conversely, treating a chart move as a realised return without allowing for executable prices overstates the strategy result.

Reconcile a worked trade

Assume the execution price gain is $240. Opening and closing commissions are $8 each, funding costs $18 and a conversion fee costs $3. Net profit is $203. A price loss of $240 with the same costs becomes a loss of $277. The fee schedule matters especially when expected gains are small or the strategy trades frequently.

Keep currency treatment explicit

If the CFD result is in euros but the account is in dollars, record the conversion rate and timing. The provider may convert automatically or leave a currency balance. Those alternatives create different exposures and costs. Compare estimated charges with actual statements and investigate unexplained differences before increasing trade frequency or size.

Try it yourself

A trade earns €150 from execution prices. Commissions total €12 and funding is €6. The remaining amount converts at $1.10 per euro before a $2 conversion fee. What reaches the dollar account?

Show the worked answer

The euro result is €132. Conversion produces $145.20, and the $2 fee leaves $143.20. No separate spread deduction is needed because the starting result used actual fills.

Further reading

Educational material, not a recommendation to trade. Numerical examples are hypothetical. CFDs involve leverage and substantial risk of loss. Availability, costs and protections depend on the contract, legal entity, jurisdiction and client classification.

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