With $SPX around 7465.17, I'm analyzing the total cost of carry for a long S&P CFD position versus rolling $ES futures. The funding rate on CFDs can sometimes be a significant drag on longer-term trades. Anyone have a clear breakdown of their experience?
CFDs are great for short-term tactical trades, but for holding a trend for weeks or months, futures are almost always more cost-effective. The spread between them gets wider with time.
I've definitely noticed the CFD funding costs erode profits on positions held longer than a few days. For anything over a week, ES futures usually come out ahead even with the rolling.
Good point on the funding costs. I've personally switched to micro futures for longer S&P exposure precisely because of this. More transparent and predictable.
It really depends on your broker's CFD rates and the current interest rate environment. Sometimes the overnight funding is negligible, other times it's a killer. Always check the specifics.
Are you factoring in the slippage and potential wider spreads when rolling ES futures? That can add up too and sometimes negates the funding advantage.