Please be aware that fee changes always apply to open positions. Fees can be updated at any time, without prior notice, according to market conditions. We encourage you to periodically visit the TBanque Fees Page to stay updated on current fees.
Here at TBanque, we are continuously trying to improve your trading experience, by giving you a trading platform that operates transparently, while simultaneously maintaining an easy-to-use interface. One way to do this is by unifying many of the nightly and weekend rollover fees for various assets, with a single formula used for each asset class. In this way, you can easily determine exactly what fees you are paying and have a clear understanding of your finances on the platform.
While stocks, ETFs and cryptocurrencies are bought and sold on TBanque with the trader owning the underlying assets (for long, non-leveraged positions), other assets and leveraged or short positions for stocks and ETFs, are traded as CFDs, which incur rollover fees.
Please note: The new fees come into effect on July 8th, 2018.
What is TBanque doing?
We are unifying fees across various asset classes, using a single formula for specific groups. This way, instead of looking up how to calculate the rollover fees for each asset, traders can now use a single formula for a much larger group of instruments.
Tip: When you open a CFD trade, the nightly and rollover fees will appear at the bottom of the Open Trade popup window.
How are fees calculated?
The formula will be different for each asset class. The fees are calculated according to market conditions and could change on a daily basis, and the rate applies until the time of the next calculation. Heres a breakdown of the new formulas:
Indices
For BUY (long) positions: (Units * Price) * (3% + LIBOR)/365
For SELL (short) positions: (Units * Price) * (3% LIBOR)/365
Basically, for long positions, we take the number of units bought, multiply that by the price of each unit, then multiply that by the TBanque markup added to the monthly LIBOR (an international interest rate banks use for loans) at the time of the calculation. The result is divided by 365, to reflect the daily fee. For short positions, the LIBOR is deducted from the TBanque markup.
Example: Annie buys 1 unit of SPX500 (priced at $2,500) and the current LIBOR is 1.9597%.
The equation will be: (1 * $2500) * (3% + 1.9597%)/365 = $0.3397
Therefore, the nightly rollover fee for that position will be $0.3397 per night.
Spot metals and currencies
For BUY (long) positions: (Units * Price) * (MU /365) + (Units * Tom-Next Rate)
For SELL (short) positions: (Units * Price) * (MU /365) (Units * Tom-Next Rate)
For long positions, the unit number is multiplied by the price per unit, and then multiplied by the daily expression of the annual TBanque markup (MU), which is 1.5% for spot metals and 1% for currencies. The number of units is then multiplied by the Tom-Next Rate, which is a standard, short-term rate for spot metals and foreign currency trading. For short positions, the unit number multiplied by the Tom-Next rate part of the equation is subtracted from the fee.
Example: Bob buys 1 unit of Gold (priced at $1,300), and the current Tom-Next is $0.07.
The equation will be: (1 * $1300)*(1.5%)/365 + (1 * $0.07) = $0.1234
Resulting in an overnight fee of $0.1234 for that position.
Spot energy
TBanque offers Spot CFD pricing on Oil and Natural Gas to enable you to open positions that are not subject to a contract that expires.
The price of the Spot CFD is derived from the two upcoming Futures contracts on the underlying commodity. The Future contract with the closest expiry date is called the Front. The Future contract with the second-closest expiry date is called the Next. As soon as the previous contract expires, the price we offer is equal to the Front month contract. When the Front month contract expires, the Next month contract becomes the Front month contract.
In between these two expiry points, the price gradually moves along a curve from the Front price to the Next price, regardless of market forces. In order to offset the profit or loss made from this movement, the overnight fee TBanque applies on Oil and Natural Gas contains an adjustment which credits or debits one days movement along the curve.
For BUY (long) positions: -{[(Markup % * Price) / 365] + [1/NumDays * (Next Front)]} * Units
For SELL (short) positions: -{[(Markup % * Price) / 365] [1/NumDays * (Next Front)]} * Units
An annual percentage markup is added to the current price of the instrument (such as oil), and then divided by 365 to reflect a daily rate. For long positions, to that we add the result of an equation where 1 is divided by the number of days between the expiration dates of the current (front) and the next contract for the relevant spot energy instrument, multiplied by the difference between the price of both contracts. The resulting number is then multiplied by the number of units in the position, to reflect the overnight fee. All negative numbers refer to a fee; all positive numbers show a credit.
Catherine buys one unit of oil. The current price is $65 and the current markup is 2.5%. The front contract expires in 22 days and oil is priced at $64 on it. The next contract expires in 52 days and oil is priced at $67 on it.
The equation will be: -{[(0.025 * 65) / 365] + [1/30 * (67-64)]} * 1
Which means the overnight fee for the position would be -$0.1044
Please note: The explanation above corresponds to an upwards sloping futures curve. On a downward sloping curve fees for buy and sell are reversed.
How does this affect you?
The fees apply to all of your currency, index and commodity positions held overnight or over the weekend. The overnight fee for each position is clearly displayed when opening a new position.
We realize that not all of our traders manually calculate overnight fees for each of their positions. However, since one of our core values is transparency, we want you to understand how our fees are calculated. We hope that you now have a better understanding of our fees and realize that this is not an arbitrary number added to your positions, but rather, a fee calculated using standard industry rates.
Your capital is at risk. This is not investment advice. CFD trading.
