Every market has two prices – the buy and the sell price, the spread is the difference between the buy and sell price.
In the same way a high-street retailer adds a little extra to the price when it buys stock from a wholesaler, the spread is how most trading providers compensate themselves for the service they provide.
Variable spreads
Variable spreads may fluctuate throughout the day. With variable spreads, we will quote you the minimum spread it could be, plus an average spread for a defined historical period of time.
Stock CFDs are the only asset class where you will have to pay a commission, a one-time fee for opening and closing the trade.
Commissions vary by market: for most US stocks it is 1.8 cents per share, and 0.08% of the consideration for most UK, EU, and Asian stocks. Our minimum commission rates are 10 of the stock’s base currency.
Details on the commission rates for each stock CFD can be found within the Market 360 sheets on the trading platforms.
When you hold a position overnight, you either pay or receive a rollover fee (also known as a financing charge). These fees fluctuate daily and are different for long and short positions.
Rollovers are only applied to positions that are open at market close in New York – 5pm ET.
A rollover fee is calculated using a swap rate. The swap adjustment is simply the accounting of the cost-of-carry on a day-to-day basis (we do not charge rollover on intraday trades).
The swap rate is measured by the difference in interest rates between the two currencies. We source the swap rate from major financial institutions which base it on a variety of factors such as inflation and key technical indicators.
The rollover rates as calculated as follows:
When trading our share CFDs, you do not receive any dividends because you do not own the actual stock. Instead, what occurs is a dividend adjustment.
This is because when a company pays out its dividends on the ex-date, the share price takes a slight dip; money has flowed out of the company and into the pockets of the shareholders.
At Wealthwavesinc.com, we balance the positive effect of the dividend against this dip in the share price.
What happens is that a dividend adjustment occurs at the close of business before the ex-dividend date:
Then all things being equal, the market then opens lower on the ex-date by the dividend amount.
Therefore, the dividend has not impacted your trade or any profit/loss you may have made.
A fee of $15 per month is charged to accounts after there is no trading activity for 12 months.
‘Activity’ is defined as placing a trade and/or maintaining an open position during this period. Placing an order on an account without executing a trade will not qualify as activity for these purposes.
If your account has been inactive for a longer period of time, we may need to reassess your trading experience and ensure that we have your up-to-date contact details and information.
You would need to complete our account reactivation form and a member of our Client Services team will be in touch to let you know if we need anything further from you, or to let you know that your account has been reactivated.
With CFD trading, the profit or loss will be in the currency of the instrument you trade.
For example, you may have EUR as the base currency for your account, but if you trade Wall Street, the profit or loss for that trade will be in USD. By trading a host of international instruments, you would end up with balances that are comprised of multiple currencies.
FOREX.com has a process called Back to Base, which automatically converts any realized profits or losses, adjustments, fees and charges that are denominated in another currency, back to the base currency of your account.
Borrowing costs are incurred when you short a shares CFD position, and reflect a charge incurred in the underlying market when the underlying asset is borrowed in order to sell and return at a later date. Very few markets will incur a borrowing charge, and to determine whether the market you wish to trade has borrowing costs or not, please check the relevant market information sheet or contact us for more details.
Overnight funding, also known as rollovers, are charges that you pay or earn when holding a position open overnight. This daily overnight funding fee is automatically applied to your trading account each day that you hold an open position (including weekends).
Wealthwavesinc.com does not charge data exchange fees. However, you may incur an overnight funding/rollover charge if you hold your positions overnight.
In typical market conditions, this is the difference between the rate at which your order was executed, and the mid-point of the bid/offer spread at the time your market order was received. Keep in mind that pending orders become market orders once they are triggered. Mid-point spread cost typically reflects the cost of your trade outside of any commissions.
During extreme market conditions, the time period when a market order is received versus when the order is ultimately executed may increase. This increase in time period can result from many factors including but not limited to market volatility, available liquidity, pre-trade available margin check, price validation, etc.
The potential delay in order execution during extreme market conditions may cause wide variations of your spread cost at the time of execution, measured as the difference between bid/offer versus the mid-point at time of execution. For example, these variations may result in a smaller than normal cost figure, or even a positive cost figure, in the case of limit orders filled at a better rate than the rate at which your limit was triggered.
Conversely, these variances may reflect a larger than normal cost if your stop order rate was executed worse than the rate at which it was ultimately triggered. As noted above, these variations can result from many factors.
Trading in markets that settle in a different currency from your trading account’s base currency may incur a currency conversion charge.
For example, if your trading account base currency is US Dollars and you trade USD/JPY, your realized profit or loss as well as any associated fees, charges, and commissions will be automatically converted from JPY back to US Dollars before posting to your trading account.
Our standard charge for this conversion is +/-0.5% from the market rate at the time of conversion. Conversely, you will not incur this charge if you only trade products that settle in your account’s base currency, such as EUR/USD in a US Dollar based account.
