Glossary entry
Overnight financing is a charge or credit associated with carrying certain leveraged positions beyond a daily cutoff. Its calculation may reference a benchmark rate, a provider adjustment, position value, and the number of days charged. Different instruments embed financing differently, so a separately displayed daily fee is not universal across all investments.
Illustrative example
A hypothetical annual financing rate applied to 10,000 of exposure creates a daily amount based on the contract's day-count convention and applicable holding days.
What to consider
Read the formula, cutoff, and weekend treatment. A favorable price move can be outweighed by accumulated financing and other trading costs.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.