Calculation of Financing Costs


(a) For each open Position a Daily Financing Amount (Fd) is calculated in the manner described below. If Fd is positive it is payable to the Customer by ABN AMRO and if it is negative, it is payable to ABN AMRO by the Customer and is then credited to or, as the case may be, debited from the relevant Trading Account at or about 1500 hours.

(b)There are two elements to the calculation of the Daily Financing Amount for an open Position (i) the financing amount on the Reference Item notionally bought or sold and (ii) the financing amount on the currency notionally paid or received in connection with that Trade. For example, the purchase of Gold creates a Long Position in Gold on which notional financing is paid to the Customer and an effective short position in USD on which the Customer pays financing. Conversely, the sale of Gold creates a Short Position in Gold on which notional financing is paid by the Customer and an effective long position in USD on which the Customer receives financing.

(c) The Daily Financing Amount is calculated for each open Position in accordance with the following formula:

Fd = Fr - Fp

Where:

(i) Financing receivable by Customer Fr is the financing receivable by Customer (i.e. on the Reference Item notionally bought or on the currency notionally received when a Reference Item is sold) calculated as follows:

Fr = (S x Po x Rb x d /t) x C

(ii) Financing payable by Customer

Fp is the financing payable by the Customer (i.e. on a Reference Item notionally sold or on the currency notionally paid when a Reference Item is bought) calculated as follows:

Fp = (S x Po x Ro x d /t) x C

Where:

S = Trade Size

Po = Opening Trade Price

Ro = applicable offer financing rate

Rb = applicable bid financing rate

t = the actual number of seconds in the calendar year in which the relevant calculation period falls

C = the prevailing applicable ABN AMRO bid or offer exchange rate as quoted on marketindex to convert to the Base Currency of the relevant Trading Account. If the Opening Trade Price is denominated in the Base Currency, C=1

d = the period in seconds between (i) the opening of the Position and the first daily calculation time and, subsequently, between (ii) a daily calculation time and the next consecutive daily calculation time and where the daily calculation time is 1500 hours.

However, if the applicable financing rate (Ro or Rb as the case may be) changes during this period “d” then the calculation set out above will be performed separately for each period within the overall period “d” in respect of which a particular financing rate applies. The value for Fr or Fp as the case may be will be the aggregate of the separate amounts calculated.

For example, if the applicable rate is say 2% for 1500-1700 hrs and then 2.1% until 1500 hours on the following day then the relevant financing calculation would be carried out separately for the period 1500-1700 hours using 2% and for the period from 1700 hours on day 1 to 1500 hours the next day using 2.1% and the results of these two calculations would be added to produce the relevant financing amount

Risk Warning: marketindex offers leveraged products that carry a high degree of risk and it is possible to lose your entire investment (i.e. your total marketindex trading account balance). You should only speculate with funds that you can afford to lose. These products may not be suitable for all investors, you should therefore ensure you fully understand the risks involved, and seek independent advice where necessary. For more information please refer to Important Information on Risk, General Derivatives Risk Warning Notice, Terms & Conditions and ABN AMRO Bank N.V. Conflicts of Interest Policy.