When investing in the Dow Jones (DJ30) index on eToro, you primarily incur two types of fees: spreads and overnight/weekend fees. Spreads are the difference between the buy and sell prices of the index, and these fees apply when you close your position. If you hold your position overnight or over the weekend, small overnight or weekend fees are charged, especially if you're using leverage in your investment.'
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Through my extended experience trading the Dow Jones index (DJ30) on eToro, I have gained a thorough understanding of the various fees and commissions involved. In this article, I would like to share these important insights to help you comprehend the potential costs you might encounter when trading this particular index via this platform.
Before delving in, it's essential to understand that trading the DJ30 on eToro means you are dealing with index CFDs (Contracts for Difference). CFDs offer the flexibility of leveraged trading and short selling without the need to acquire the actual assets. However, this convenience comes with associated costs like spreads and overnight fees.
Spreads are the difference between the Buy and Sell prices of the Dow Jones index, a common fee structure on platforms like eToro. These fees are applied at the closure of your position. Be aware that spreads can widen in response to market conditions.
The lowest spread possible for DJ30 on eToro is 6 points. "Points" refer to price changes to the left of the decimal point; for instance, a movement from 35151 to 35281 in the DJ30 is a 130-point change. Remember, these spreads are variable and can change with market dynamics.
Holding a CFD position on the DJ30 index overnight incurs a fee relative to your position's value, essentially an interest charge for the leverage used. Additionally, positions held over the weekend attract Weekend Fees, which are triple the standard overnight fee.
It's important to note that rollover fees (overnight/weekend) can vary based on global market conditions. My last check showed that the rollover fee for the eToro Dow Jones index was $1.32024655 for Sell (Short) positions and $-8.19087285 for Buy (Long) positions, charged per night per unit. These rates are subject to change, so I recommend consulting eToro's fees pages for current figures.
Here's my quick tip: You can find the overnight fees just by accessing the platform and going to the DJ30 asset page. Click on the "Trade" button and in the pop-up window, you'll find the current overnight fees indicated just below the "Open Trade" or "Set Order" button. This is the method that I personally use whenever I wanted to check the actual fees for rollovers.
When you trade this CFD index on eToro, the primary fees you encounter are the spreads and the overnight/weekend fees for positions held past the trading day. I hope that this guide I crafted has helped you understand the various costs associated with investing in this index on this platform and has provided clarity to enhance your trading decisions.
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Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
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51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
