FTSE financing charges - help please

This is a discussion on FTSE financing charges - help please within the Indices forums, part of the Markets category; hey guys, can anyone tell me, if i short the ftse, will i currently be receiving interest or paying interest ...

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Old Jul 11, 2009, 1:55am   #1
 
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FTSE financing charges - help please

hey guys,

can anyone tell me, if i short the ftse, will i currently be receiving interest or paying interest to carry the position overnight?

if this is a dumb question, it is because i dont trade indices, at all, but am just sizing something up for calculation purposes.

thanks
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Old Jul 11, 2009, 10:37am   #2
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Receiving but you won't notice it because it's already built into the price you deal at, assuming you're using futures or spread bets. CFDs are a different matter.

You also won't notice it because it's so small, interest rates at 0.5%. In fact I doubt any short position receives any interest with rates virtually 0.

If you're long you'll pay interest, but again you won't realise this (nor will it be broken down for you) as it's built into the dealing price.

My advice is to forget about paying or receiving interest as it's of no relevance, ie it won't make you or save you any money if you're the world's number 1 expert on the matter. Instead, concentrate on where the market is going.
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Old Jul 11, 2009, 4:14pm   #3
 
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jiggly started this thread thanks anly,

primarily I am interested in the equity gain if the trade works out but holding a position for maybe a year or two, I would rather be paid the interest instead of paying it during this holding period.
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Old Jul 11, 2009, 4:52pm   #4
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Some brokers currently you will pay irrespective of long or short as its say LIBOR +/- 2.5% which equates to say a minus 3% in interest being received if you are short (which is paying) and you will also pay +3% on the long.

You will no doubt lose money if you short the FTSE for 2 years.
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Old Jul 11, 2009, 5:38pm   #5
 
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Quote:
Originally Posted by ukdaytrader View Post
Some brokers currently you will pay irrespective of long or short as its say LIBOR +/- 2.5% which equates to say a minus 3% in interest being received if you are short (which is paying) and you will also pay +3% on the long.

You will no doubt lose money if you short the FTSE for 2 years.
so I need to calculate specifically how the broker is working it out,

you think the ftse is going to end up after 1-2 years then?
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