CFDs Trading Conditions
Stock CFD Margins
Stock CFDs are offered under a number of margin groups with margin requirements that depend on the Market Capitalisation, liquidity and volatility of the stock.
| Margin Group | Category | Minimum Margin |
|---|---|---|
| Group 1 | Indices | 5% |
| Group 2 | Low risk stocks | 10% |
| Group 3 | Medium risk stocks | 15% |
| Group 4 | High risk stocks | 25% |
| Group 5 | Very High risk stocks | 50% |
| Group 6 | Extreme risk stocks | 100% |
Refer to CFD Margin Groups for which margin group a particular stock is currently traded under.
You must maintain funds in your account to cover your CFD exposure at all times.
Index CFDs
Index CFDs are over-the-counter products where the price is established by Keytrade Pro. Index CFDs aim to reflect the fair value of the underlying index but the actual bid and ask price may differ slightly from the actual index level.
Index CFD spreads
Index CFDs are traded on the index level with the following bid/ask spreads:
| Stock Index | Spread |
|---|---|
| S&P 500 Index | 1 index point |
| NASDAQ 100 Stock Index | 1 index point |
| Dow Jones Industrial Average | 7 index points |
| FTSE 100 Index | 3 index points |
| DAX®30 Performance Index | 3 index points |
| CAC 40 Index | 5 index points |
| Dow Jones Euro STOXX 50 Index | 5 index points |
| Swiss Market Index | 7 index points |
| ASX S&P 200 Index | 4 index points |
| Nikkei 225 | 30 index points |
| OMX Stockholm 30 Index | 1 index point |
DAX®30 is a registered trademark of Deutsche Börse AG.
CFD spreads and conditions
| CFD Currency/ Exchange | Spread Markup | Ticket Fee Threshold | Ticket Fee |
|---|---|---|---|
| Helsinki (HSE) | +/-0.1% | 10,000 | 10 |
| AUD | +/-0.1% | 10,000 | 10 |
| CHF | +/-0.1% | 15,000 | 18 |
| DKK | +/-0.1% | 100,000 | 65 |
| EUR | +/-0.1% | 10,000 | 12 |
| GBP | +/-0.1% | 8,000 | 8 |
| JPY | +/-0.15% | 1,000,000 | 1,000 |
| NOK | +/-0.1% | 100,000 | 65 |
| NZD | +/-0.1% | 10,000 | 10 |
| SEK | +/-0.1% | 100,000 | 65 |
| SGD | +/-0.2% | 17,000 | 17 |
| USD | +/-0.1% | 10,000 | 20 |
| Athens (AT) | +/-0.6% | 10,000 | 12 |
Index CFD Margin Requirements
For index CFDs, you must maintain a minimum of 5% of the investment value in your account to cover your CFD exposure at all times.
CFD Interest and Accrual Rates
If you hold a CFD after the stock market closes, you are subject to a financing fee or accrual:
- When you buy a CFD, you are subject to a financing charge at the Inter-Bank Offer Rate for the currency in which the share is traded (e.g. LIBOR plus 3%)
- When you short sell a CFD, you receive an interest accrual at the Inter-Bank Bid Rate for the currency in which the share is traded (e.g. LIBID minus 2.5%)
If you open and close a CFD position within one trading day, you are not subject to these charges or accruals.
Currency Conversions
Currency conversions of trading costs as well as profits and losses from trading activities are done using the prevailing close rate as of 17:00 New York Time, plus/minus 0.5%.
Short Selling CFDs
When short selling a CFD directly on an exchange (that we do not market-make), you will be affected by the rules for the stock market in that country. For example:
- For US CFDs, an up-tick rule applies where you can only short sell on an up-tick
- For Australian CFDs, you may experience limitations on the amount of CFDs you can short trade in a single day due to limited borrowing availability in the underlying market
When short selling CFDs, you can experience forced closure of a position if your CFDs get recalled. The risk is particularly high if the stock becomes hard to borrow due to takeovers, dividends, rights offerings (and other merger and acquisition activities) or increased hedge fund selling of the stock.
Dividends on CFD Positions
Holders of long CFD positions will, when dividends are paid on the underlying share, qualify for a proportional payout. Holders of short CFD positions will have to pay an amount equal to the full (gross) dividend paid on the underlying share.
The amount will be credited/debited your trading account on ex-date, unless the dividend rate is unconfirmed in which case the dividend is paid on pay date (e.g. ADR's).
Dividends on CFD positions are paid and debited through the platform and not by the underlying company. Dividends paid or debited are cash adjustments reflecting corporate actions in the underlying share and as a result will not take into account special dividend taxes that may be applicable. CFD dividends may therefore differ from the dividends payable on the underlying share. Holding a CFD does not confer the rights to any dividend imputation credits.
Partial Fills
Partial fills may occur on limit orders and the remaining amount stays in the market as a limit order and may be filled within the order duration.
Market orders can be filled at numerous levels, the price paid will be the volume weighted average price of all the fills.
Nordic Markets
Orders traded in the Nordic markets (Norway) are split into an "Even lot" which will be traded, and a remainder which will be routed to the odd-lot book.
When part of an order is routed to the odd-lot book, limit orders will be filled if possible or left on the book until a fill is possible. A market order will be filled immediately if possible, and will otherwise be cancelled (fill or kill principle).
