Total Cost of Ownership (TCO) and the IG Index P&L Breakdown

When your longer-term rolling position trades close out, it can sometimes be a little difficult to figure out how much money you actually made. Sure, the closing price might be higher than the opening price — lucky you, on a long position — but how much did the position cost you in overnight financing / rolling / funding charges while it was in play? And did you receive any dividend credits along the way, which will have boosted your profit even more?

IG Index offers a handy tool for showing the Total Cost of Ownership (TCO) of your closed positions, in the form of a report called the P & L Breakdown (DFBs) report, which for daily funded (i.e. rolling) spread bets provides you with…

“..full details on your closed positions, including Funding, Dividend Payments, Cash Corrections and Stock Borrowing information.”

Here I show you the total cost of ownership (or conversely, the real net profit) for a selection of my spread bets that stopped-out recently:

IG Index Profit Breakdown

See (for example) how my Flybe position made a gross profit of £11.95 while incurring funding charges of £1.55 thus leaving me with a net profit of £10.40. It’s a pity I didn’t pick up any dividends along the way, to help offset the cost of financing. But I came out ahead, and that’s the main thing. On Halfords, I wasn’t so lucky, but overall — yesterday’s combined stop-outs yielded me a net profit of £3.40. You can scale up my nominal £1-per-point bets in order to realise net profits of £34, £340, £3400, or even £34,000 to suit your tastes.

As far as I know, only IG Index provides exactly this kind of report, and it’s mighty useful for tracking how well you’re really doing.

Disclaimer: this posting is for general education only; it is not trading advice.