Our trading costs

Yes, we do offer Negative Balance Protection (NBP), which ensures that a retail trader can’t lose more than the funds deposited in their trading account. It works by automatically closing positions if the account reaches a predetermined threshold. 

This is especially important for leveraged products like CFDs, where rapid market movements can generate losses faster than a trader can react, potentially resulting in a negative balance. 

Any losses beyond the deposited funds are absorbed by Trade Nation, resetting the trader’s balance to zero. 

In many jurisdictions, including Europe, the UK, and Australia, these safeguards are regulatory requirements for retail clients. Choosing a regulated broker ensures these protections, offering a critical layer of security against market volatility and broker insolvency. 

Trade Nation goes a step further by offering clients who signed up through Seychelles the same NBP as on the other regulated entities. Those clients who signed up through Bahamas, the NBP is mandated in the Securities Industry (Contracts for Difference) Rules.

No, there are no fees imposed by Trade Nation for deposits and withdrawals. TN bears all the costs imposed by PSPs. Only fees that may be charged to clients would come from their banks, mainly in the form of FX conversion markups. 

If you keep a position open overnight, a rollover fee may apply. This means you could either pay a fee or receive a credit, depending on the market/instrument you’re trading and whether your position is long or short.  

Rollover fees are only applied to positions that remain open at the New York market close (5pm ET). They don’t apply to trades opened and closed during the same day.  

Rollover rates are calculated in the following way: 

• Long positions – swap charges or credits are calculated as –1 × trade size × swap points. 
• Short positions – swap charges or credits are calculated as trade size × swap points. 

There are some notable exceptions to the basic rule for overnight charges, that the longs pay and the shorts get paid.  

Commodities: 

When trading in commodities, there is a component of the swap charge that incorporates the cost of carry. This term defines the storage cost of the product. Barrels of oil in a warehouse or high security vaults for Gold and Silver, etc. and these costs can vary depending on market conditions.  

Trade Nation do not determine them; they are passed along to us and are market-driven; therefore, no one has control over them. Trade Nation must, however, pass these costs along to the final holders, i.e. you if you have a position that is held over the roll.  

There is also a slightly higher fee payable at 3% instead of the 2.5 we usually charge for other products. It is due because of the complexities involved in administering these markets. 

Since the variable in the equation is the cost of carry and there can be shocks or unexpected cost expectations, the usual dynamic can change, and this means you may pay instead of receiving payment when short.  

Here is the equation that sets out the overnight swap charge in commodities. 

{(Back Futures Month Price) – (Front Futures Month Price)} / {(Days remaining in Back month until expiry) – (Days remaining in Front month)}. 

Shares: 

Holding a stock position overnight may also involve a quirk where the usual 'longs pay' and 'shorts receive' rule changes.  

The dynamics of shorting a stock involve a process called Borrowing. Someone along the chain that holds a long underlying position will effectively rent their holding, for a fee, so that it can be sold to make a short position.  

If many market participants have borrowed the stock for this purpose, the fee will go higher and higher. Simple demand and supply economics take hold, supply is limited, and demand is high, the price goes up.  

Borrowing costs are not usually a dynamically changing factor in the shorting of stocks. However, in some circumstances where it is, the shorts will also pay overnight swap charges with the longs, instead of receiving it.  

FX: 

To calculate the Spot FX overnight fee, we need to know the Central Banks’ interest rates of the 2 countries in the traded market. For example, for a EUR/USD trade, the Eurozone Refinancing Rate and the Fed Funds rate for the USA are used. Currently, these are 2.15% and 3.75%, respectively.  

From here, the calculation is relatively straightforward; the difference between the 2 rates is 1.6%. Trade Nation add our usual fee for the service of 2.5%.  

Therefore, on long positions, holders are debited (1.6% + 2.5%) = 4.1%; and for short positions, they are credited (1.6% - 2.5%) = -0.9%.  

For example, a long £1 per point spread trade in EUR/USD, the GBP value of £1pp at a current price of 1.1750 is £11,750. Overnight funding + our fee, for the long position holders, as we have seen above, is 4.1%. Calculated over the value of the trade, which is £11,750, gives £481.75 p.a. To find the daily charge, we divide by 365: (£481.75/365) = £1.32 per day. 

For short positions, the rate as we have seen is (1.6% - 2.5%) = -0.9%.  

Again, assuming the same price of 1.1750, the £1 per point equivalent value is again £11,750. This time the short interest is -0.9%. This gives a yearly amount of overnight funding of £-105.75 and a daily £-105.75/365 = -29p per day.  

As you are short in the example above, you would expect to be credited 29p for every day you roll the position over. However, you must also bear in mind that being paid a negative number (-29p) is the same as a debit from your account, and so in the example above, you are debited overnight funding when either long or short in EUR/USD. 

*Please note: All examples mentioned are for illustrative purposes only.

When a company pays a dividend to its investors, the cash position of the company changes because they have literally given away money to their shareholders. This payment has a relative and offset effect on the share price.  

Long holders see the share price go down, but they have the cash dividend to compensate; short holders have the cash dividend removed from their balance but are compensated by the share price moving down. On a net basis, these are relatively equal and opposite forces which keep the equilibrium intact for both parties.   

For cash index markets, the constituent companies pay dividends, and so it has a relative effect on the index price. Therefore, long holders receive a smaller relative dividend, which again offsets the downward price pressure the payment has on the index; whereas short holders have cash removed to offset the downward pressure on price. As above, this process brings about equilibrium.