# Financing and Overnight Costs > Holding leveraged positions overnight costs money. Learn margin interest, forex swaps, CFD financing, carry costs and how to include them in your trade plan. Source: https://learn.tradelabsai.com/orders/financing-and-overnight-costs/ Track: Orders and Execution · Level: Intermediate · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "Financing and Overnight Costs", https://learn.tradelabsai.com/orders/financing-and-overnight-costs/ Financing costs are what you pay, or occasionally earn, for holding a leveraged position over time. If you borrow money to buy shares, hold a forex position past the daily rollover or keep a CFD open overnight, interest is charged on the position. These costs are small for a day but compound over weeks and months, and they are one of the main reasons leveraged products are poor long term holdings. ## Where financing costs appear | Product | How financing is charged | |---|---| | Stock margin account | Interest on the borrowed amount, daily, at the broker's margin rate | | Forex | Daily swap based on the interest rate difference between the two currencies, plus broker markup | | CFDs | Daily charge on the full position value, typically a benchmark rate plus a markup | | Crypto perpetual futures | Funding payments between longs and shorts every few hours | | Futures | No separate charge; financing is built into the futures price | | Leveraged ETFs | Built into the fund's costs and performance | ## CFD financing in detail **Example: Holding a share CFD for 60 days** You buy a CFD on £20,000 of shares. Your broker charges a benchmark rate of 4.5% plus a 2.5% markup, 7% a year, on the full £20,000, not just your margin. Daily cost: £20,000 × 7% ÷ 365 = about £3.84. Over 60 days: about £230. On £4,000 of margin (5:1 leverage), that is a 5.75% drag on your capital before the share price moves at all. Short CFD positions may receive a small credit or pay a smaller charge, depending on the benchmark rate and markup. ## Forex swaps In forex, each currency carries an interest rate. Holding a position past the daily cut off means you earn interest on the currency you bought and pay interest on the one you sold, adjusted by your broker. If the currency you hold has the higher rate, the swap may be positive; if not, it is a cost. Positions held over the Wednesday rollover are typically charged three days to cover the weekend. See [Rollover and Swap in Forex](https://learn.tradelabsai.com/forex/rollover-and-swap-in-forex/). ## Margin interest on stocks Brokers charge interest on margin loans at rates that usually depend on the loan size, often well above central bank rates for smaller balances. On a $20,000 loan at 10% a year, the cost is about $5.50 a day or $2,000 a year. See [Margin](https://learn.tradelabsai.com/markets/margin/). ## Crypto funding rates Perpetual futures have no expiry, so exchanges use funding payments to keep their price near spot. When funding is positive, longs pay shorts; when negative, shorts pay longs. During strong rallies, positive funding can reach annualised levels of tens of percent, a heavy cost for leveraged longs held for days. See [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/). ## Carry: when financing works in your favour Financing is not always a cost. In a **carry trade**, a trader deliberately holds a higher yielding asset funded by a lower yielding one, earning the difference over time, for example long a high interest rate currency against a low rate one. Carry can be a steady source of return until a sharp reversal wipes out months of gains. See [Carry Trading](https://learn.tradelabsai.com/strategies/carry-trading/). ## Including financing in your plan 1. **Estimate the daily cost** before entering any leveraged position you may hold overnight. 2. **Compare it with your expected profit and holding time.** A trade expected to make 3% over two months may lose most of that to financing. 3. **Prefer unleveraged or futures based exposure** for longer holds, where costs are lower or built in. 4. **Track financing in your journal** as a separate cost. ## Frequently asked questions ### Why was I charged overnight on my CFD? Because CFDs are leveraged, and brokers charge daily interest on the full position value for positions held past the daily cut off. ### Can financing ever be positive? Yes. Forex swaps and crypto funding can pay you if you hold the side that receives interest, and short CFD positions sometimes receive a credit. ### Are futures cheaper to hold than CFDs? Usually, for longer holds, because futures have no separate daily financing charge; the cost of carry is priced into the contract. ## Sources - Wikipedia, [Cost of carry](https://en.wikipedia.org/wiki/Cost_of_carry) ## Continue learning - Next lesson: [Roll Costs](https://learn.tradelabsai.com/orders/roll-costs/) - Previous lesson: [Borrow Fees and Stock Loan Costs](https://learn.tradelabsai.com/orders/borrow-fees-and-stock-loan-costs/) - Related: [Borrow Fees and Stock Loan Costs](https://learn.tradelabsai.com/orders/borrow-fees-and-stock-loan-costs/): Short sellers pay to borrow shares. Learn how borrow fees are set, easy and hard to borrow stocks, recalls, dividend payments and how fees affect a short trade. - Related: [Rollover and Swap in Forex](https://learn.tradelabsai.com/forex/rollover-and-swap-in-forex/): Holding a forex position overnight earns or pays interest called rollover or swap. Learn how it is calculated, triple Wednesday, swap free accounts and carry. - Related: [Margin](https://learn.tradelabsai.com/markets/margin/): Margin is the deposit you put up to borrow money or open leveraged positions. Learn initial and maintenance margin, margin calls, interest and how to avoid them. - Related: [What Is a CFD?](https://learn.tradelabsai.com/markets/what-is-a-cfd/): A CFD lets you trade price moves without owning the asset. Learn how contracts for difference work, margin, overnight costs, where they are legal and the risks. - Related: [Funding Rates](https://learn.tradelabsai.com/crypto/funding-rates/): Funding rates are periodic payments between longs and shorts on perpetual futures. Learn how they are calculated, what extreme funding means and how to use it. - Related: [Carry Trading](https://learn.tradelabsai.com/strategies/carry-trading/): Carry trading holds higher yielding assets funded by lower yielding ones to earn the difference. Learn how carry works across markets and why carry trades crash. - Related: [All-In Trading Cost](https://learn.tradelabsai.com/orders/all-in-trading-cost/): Your all-in trading cost combines commissions, fees, spreads, slippage, financing and fixed costs. Learn to calculate cost per trade, per unit of risk and per year.