Crypto CFDs: bitcoin without a wallet
We use a worked example of 0.01 lots on BTCUSD, so every peso figure can be checked by hand.
What a crypto CFD actually is
Open a chart of BTCUSD on your broker's platform. The line you see is a price, quoted in US dollars. When you buy a crypto CFD, you buy exposure to that line. No bitcoin moves to a wallet. No blockchain records anything. Your broker writes a contract with you, and the contract settles in cash when you close.
This matters because the thing on your screen is not the coin. The coin trades on exchanges that set their own prices. Your broker quotes a price for the contract. The two usually sit close together, but they are not the same number, and they can separate when one market is busy and the other is quiet.
The contract has a size. On BTCUSD, one lot is a fixed amount of bitcoin set by the broker, and 0.01 lots is one hundredth of that. The peso value of your position is that size multiplied by the price. You post margin, which is a fraction of that value, and the rest is borrowed from the broker for as long as the position stays open.
Why the clock and the calendar change the cost
Crypto trades every day, including weekends. Your contract does not. The broker applies a funding charge at a set time each day, and the rate is stated as a percentage of the notional value. Hold through that time and the charge is taken from your account balance. Hold for three days and it is taken three times.
On EUR/USD, the spread is usually a fraction of a pip and the market closes on Friday evening. On BTCUSD, the spread is wider because the underlying market is thinner and the broker carries more risk. That wider spread is a cost you pay on entry and again on exit, before any funding charge is added.
Weekend moves are the part people miss. The chart can gap or run while the coin market is open and your contract is still accruing funding. A move that looks small on Friday can be larger by Monday, and the funding charge has been applied on each day in between. The result on your account is the price change minus the spread minus the funding.
How the peso figures are built
Start with the notional value. Take the contract size for 0.01 lots, multiply by the BTCUSD price, and convert to peso at the rate your broker uses. If the notional is ₱58,000, that is the number every other cost is calculated from. It is not the money you deposit. It is the size of the position you control.
Margin is a percentage of that notional, set by the broker. If the margin rate is 10 per cent, you post ₱5,800 to open. The remaining ₱52,200 is not a loan you repay separately; it is the leverage that makes the position larger than your deposit. A 5 per cent fall in price is ₱2,900 against a ₱5,800 deposit, which is half your margin.
Funding is the notional multiplied by the daily rate multiplied by the number of days. At 0.10 per cent a day on ₱58,000, that is ₱58 a day, or ₱174 over three days. The broker may round this figure, and the rate itself changes with market conditions. Check the current rate on the platform before you open, not after.
0.01 lots of BTCUSD: margin, swap and a weekend move
| Step | Amount | Note |
|---|---|---|
| Position size | 0.01 lots | one lot of BTCUSD is a fixed contract size set by the broker, so 0.01 lots is one hundredth of it |
| Notional value | ₱58,000 | 0.01 lots at a BTCUSD price of 100,000, converted at ₱58 per US dollar: 0.01 x 100,000 x 58 |
| Margin required | ₱5,800 | a 10 per cent margin rate on the notional value: 58,000 x 0.10; the rate varies between brokers |
| Price move over the weekend | ₱2,900 | a 5 per cent fall in the BTCUSD price: 58,000 x 0.05, against a long position |
| Swap for holding over the weekend | ₱174 | three days of funding at 0.10 per cent a day on the notional value: 58,000 x 0.001 x 3; the rate varies between brokers |
| Result before other costs | ₱3,074 loss | 2,900 + 174, because both the price move and the swap went against the long position |
The broker may round the swap, charge a wider spread on crypto CFDs than on EUR/USD, and add a commission. The margin rate, the funding rate and the contract size are set by each broker and are not the same everywhere.
Doing it once, step by step
These steps walk through the costs of a small BTCUSD position in the order they appear on your account. Each one uses the figures already on the page so you can check the arithmetic yourself.
- 01
Find the contract size
Open the instrument details on your platform and look for the contract size for BTCUSD. Multiply it by 0.01 to get the size of your position. Multiply that by the current price to get the notional value in US dollars, then convert to peso at the broker's rate. This is the base figure for every cost that follows.
- 02
Check the margin rate
The margin rate is a percentage of the notional, set by the broker and shown in the instrument details. Multiply ₱58,000 by that rate to see what you must post. If the rate is 10 per cent, the margin is ₱5,800. Confirm the figure on the platform, because margin rates change and differ between brokers.
- 03
Read the funding rate
Find the daily funding rate for BTCUSD and note the time it is applied. Multiply the notional by the rate to get the daily charge. At 0.10 per cent on ₱58,000, that is ₱58 a day. If you plan to hold over a weekend, count the days the charge applies and add them up before you open.
- 04
Measure the spread cost
Look at the difference between the buy price and the sell price on the platform. That gap is the spread, and you pay it when you enter and when you exit. On BTCUSD it is usually wider than on EUR/USD. Multiply the spread by your position size to see the cost in dollars, then convert to peso.
- 05
Work out the price move
Decide what price change you are expecting and multiply it by your position size. A 5 per cent fall on ₱58,000 is ₱2,900. Subtract the spread and the funding from that figure to see the net result. If the net is negative, the position loses even when the price moves in your favour.
- 06
Decide before you open
Add the margin, the spread and the expected funding together to see the total cost of holding. Compare that with the price move you expect. If you only want the price move and not the daily charge, plan to close before the funding time. Write the plan down before you enter, not after the charge appears.
The mistake most people make here
People treat a crypto CFD as if they had bought the coin, then hold it over the weekend and are surprised by the funding charge. The chart keeps moving when the coin market is open, but your position is a contract with a daily cost. Check the contract size and the funding rate before you open, and decide in advance whether you plan to hold through a weekend. If you only want the price move, close before the charge is applied.Check yourself
On EUR/USD, one pip on one standard lot is 10 units of the quote currency. At a rate of ₱58 per US dollar, what is one pip worth in peso?
10 x 58 = ₱580.
You hold 0.01 lots of BTCUSD with a notional value of ₱58,000. The funding rate is 0.10 per cent a day and you hold for three days. What is the swap?
58,000 x 0.001 x 3 = ₱174.
A long position of 0.01 lots on BTCUSD has a notional value of ₱58,000. The price falls 5 per cent. What is the loss from the price move alone?
58,000 x 0.05 = ₱2,900.
Questions that come up next
What is the difference between a crypto CFD and buying bitcoin?
A crypto CFD is a contract with your broker that settles in cash when you close it. No coin is delivered to a wallet, and no blockchain records the trade. Buying bitcoin gives you the coin itself, which you can store and transfer. The chart may look the same, but the contract carries its own costs and does not belong to you in the way a coin does.
Why is the spread on BTCUSD wider than on EUR/USD?
The underlying crypto market is thinner, and the broker carries more risk when quoting it. That risk is paid for through a wider spread. You pay it when you open and again when you close, before any funding charge is added. The exact width varies between brokers and can change through the day.
When exactly is the funding charge taken?
The broker sets a time each day, and the rate is a percentage of the notional value. Hold through that time and the charge comes out of your account balance. Hold for three days and it is applied three times. The time and the rate are set by each broker and are not the same everywhere.
Can I hold a crypto CFD over the weekend?
You can, but the funding charge keeps applying on each day in between. The coin market stays open while your contract accrues that cost. A move that looks small on Friday can be larger by Monday, and the charge has already been taken. If you only want the price move, closing before the charge is applied avoids it.
Is a crypto CFD regulated by the SEC Philippines?
The SEC Philippines is the regulator named in this course. Whether a particular broker is registered, and what that registration covers, varies between firms. Check the broker's status directly with the regulator before you deposit anything. This course does not recommend any broker.
How do I pay for a crypto CFD account in the Philippines?
The payment methods used in this course are GCash and bank transfer. Which of the two a broker accepts, and any fee attached, varies between brokers. The money you send becomes your account balance, not the notional value of your position. Margin is a fraction of that notional, and the rest is borrowed from the broker.
The words used on this page
- Notional value
- The full size of the position you control, before margin. On 0.01 lots of BTCUSD it is the contract size multiplied by the price, converted to peso. Every other cost, including margin and funding, is calculated from this number.
- Funding charge
- A daily cost the broker applies to an open crypto CFD, stated as a percentage of the notional value. It is taken at a set time each day the position stays open. Hold for three days and it is charged three times.
- Spread
- The gap between the price at which you can buy and the price at which you can sell. You pay it on entry and again on exit. On BTCUSD it is wider than on EUR/USD because the underlying market is thinner.
- Margin
- The fraction of the notional value you must post to open a position. The rest is borrowed from the broker for as long as the position stays open. The margin rate is set by each broker and varies between firms.
- Contract size
- The fixed amount of bitcoin one lot represents on BTCUSD, set by the broker. One lot is that amount, and 0.01 lots is one hundredth of it. Check it before you open, because it differs between brokers.
- Leverage
- The effect of controlling a position larger than the money you deposit. Margin makes this possible, and it also makes losses larger than the amount you put in. The rate is set by each broker and is not the same everywhere.
What to take away
- A crypto CFD is a cash contract on the price, not the coin, so no wallet or transfer is involved.
- The notional value is the base for every cost, and margin is only a fraction of it.
- The spread on BTCUSD is wider than on EUR/USD, and you pay it on entry and on exit.
- Funding is charged each day the position stays open, including weekends, so decide before you open whether you plan to hold through one.