Hi everyone,
This is a classic problem when you apply a cash product and calculate a PV based on an underlying, rolling future. It's (understandably) tough for someone to understand this when all they want to do is trade the spread on WTI vs. Brent, but unfortunately it really isn't as simple as taking your marked-to-market entry/exits and calculating a net P&L minus an overnight financing rate.
So what PC has said is correct (although it's a bit of a scary explanation for a retail client), and, in fact, what you're seeing is transparency that is unappealing to the retail eyeball.
If, for instance, you were rolling a futures (as opposed to cash) position from month to month, you would be paying the same annualised carry, but you would be conveniently blind to it. It might make you feel better and sleep better at night, but you would be effectively charged the same cost of carry, but nobody would spell it out for you.
All CFD providers should be showing the true annual carry cost of trade when creating a cash product over anything, but unfortunately it doesn't make for great marketing!
Sorry to be a stick in the mud, but CMC's detailing the true terms of the trade in a way that others are not willing to! I think some apologies are in order...
