Crypto CFDs: bitcoin without a wallet
This lesson shows the mechanics on BTCUSD, using a rand account. The numbers are illustrative and will differ between brokers, so treat them as a method, not a quote.
How a crypto CFD price is built from the spot market
A bitcoin CFD does not have its own price. The broker takes the price of bitcoin from one or more spot exchanges and shows it as a single number. That number is the spot price plus or minus the broker's own adjustment. The adjustment covers the cost of hedging and the risk the broker carries. Two brokers can show different BTCUSD prices at the same second because they use different exchanges and different adjustments.
The price you see is in US dollars. If your account is in rand, the broker converts your profit or loss using its own USD/ZAR rate. That rate is not the same as the rate you see on a news site. It includes the broker's spread on the currency conversion. So a BTCUSD move of 2 000 points is first calculated in dollars, then converted to rand at a rate the broker sets. The rand value can differ from a simple multiplication by the rate you find elsewhere.
This matters because your rand result depends on two prices moving at once: the bitcoin price and the USD/ZAR rate. If bitcoin rises but the rand strengthens against the dollar, your rand profit is smaller than the dollar profit. If the rand weakens, your rand profit is larger. You are not trading bitcoin alone. You are trading bitcoin and the dollar against the rand in one contract.
Why the weekend changes the cost of holding
Bitcoin trades every day, including Saturday and Sunday. The spot market never closes. A crypto CFD follows that schedule, so you can open and close a position on a weekend. But the broker's costs do not sleep. The spread on a weekend is often wider than on a weekday. A wider spread means the price you buy at is further above the price you sell at. A small move on a Saturday can be swallowed by that gap.
Funding is charged every night, including Friday, Saturday and Sunday. If you hold from Friday evening to Monday morning, you pay for three nights. The charge is based on the position size and the broker's swap rate. That rate can change. Some brokers charge more on weekends because their own hedging costs rise. The funding is not a fee you can avoid by closing and reopening. It is part of the contract.
The weekend also brings gaps. A price can jump from Friday's close to Sunday's open if news breaks while most people are away from their desks. A stop loss may not be filled at the level you set. It may be filled at the next available price, which can be worse. That is not a broker error. It is how a market behaves when liquidity is thin. The risk of a gap is higher on a weekend than on a Tuesday afternoon.
What the contract size and tick value mean in rand
BTCUSD is quoted in points. One point is one unit of the price. If the price moves from 60 000 to 60 001, that is one point. The value of one point depends on your lot size. A standard lot is not the same as one bitcoin. For BTCUSD, one lot is often a fixed number of bitcoin, such as 1. A 0,01 lot is one hundredth of that. The broker's contract specification tells you exactly how many bitcoin one lot represents.
The tick value is the money one point is worth for your lot size. For a 0,01 lot, if one point is worth 0,01 USD, then a 2 000 point move is 20 USD. That is the profit in dollars before conversion. The rand value is that dollar amount multiplied by the broker's USD/ZAR rate. If the rate is 18,4100, 20 USD is R368,20. If the rate is 18,5000, the same 20 USD is R370,00. The difference is small here, but it grows with the position size.
Margin is the deposit the broker requires to keep the position open. It is a percentage of the position's notional value. Notional value is the lot size times the price. For 0,01 lot at 60 000 USD, the notional is 600 USD. If the margin requirement is 5 percent, you need 30 USD, which is about R552,30 at 18,4100. That margin is not a cost. It is your money set aside. But it limits how many positions you can hold at once.
0,01 lots of BTCUSD: margin, swap and a weekend move
| Step | Amount | Note |
|---|---|---|
| Position size | 0,01 lots | one lot is usually 1 BTC, so this is 0,01 BTC |
| BTCUSD price | 65 000 | illustrative price in US dollars |
| Notional value | 650 USD | 0,01 × 65 000 = 650 |
| Margin at 20% | 130 USD | 650 × 0,20 = 130; brokers set their own percentage |
| Margin in rand | R2 393,30 | 130 × 18,4100 = 2 393,30 at USD/ZAR 18,4100 |
| Weekend move | 300 USD | price moves from 65 000 to 68 000, a 3 000 point rise |
| Profit on the move | 30 USD | 0,01 × 3 000 = 30 |
| Profit in rand | R552,30 | 30 × 18,4100 = 552,30 |
| Swap for 3 nights | 3 USD | 1 USD per night per 0,01 lot; brokers vary |
| Swap in rand | R55,23 | 3 × 18,4100 = 55,23 |
| Net after swap | R497,07 | 552,30 − 55,23 = 497,07 |
The broker may round the swap, charge a wider spread on weekends, and add commission. The rand conversion uses the broker's USD/ZAR rate, which may differ from 18,4100.
Doing it once, step by step
This walkthrough uses a rand account and BTCUSD. You will check the contract size, calculate the rand value of a move, add the funding cost, and compare the result with the spot price.
- 01
Find the contract size
Open the broker's contract specifications for BTCUSD. Look for the contract size, which tells you how many bitcoin one lot represents. Write it down. You need this number before you can value any move.
- 02
Note the current price and the USD/ZAR rate
Write down the BTCUSD price and the broker's USD/ZAR rate at the same moment. The broker's rate is the one that will be used for conversion. Do not use a rate from another website. The two numbers together let you convert any dollar profit into rand.
- 03
Calculate the value of a one-point move
Multiply the contract size by your lot size. For a 0,01 lot and a contract size of 1 bitcoin, that is 0,01 bitcoin. If one point is one dollar per bitcoin, then one point is worth 0,01 USD for your position. Multiply by the USD/ZAR rate to get the rand value of one point.
- 04
Estimate the funding for the nights you plan to hold
Find the swap rate for BTCUSD in the broker's platform. It is usually shown as a daily charge per lot. Multiply it by your lot size and by the number of nights. Remember that a Friday hold includes Saturday and Sunday. Convert the total to rand at the same rate.
- 05
Compare the move with the total cost
Add the spread cost to the funding cost. The spread cost is the difference between the buy and sell price, multiplied by the point value. If your expected move is smaller than the total cost, the trade needs a larger move to break even. That is the break-even point you should know before you open.
- 06
Check the weekend spread before you hold
On a Friday, look at the spread on BTCUSD. Compare it with the spread on a Wednesday. If it is wider, your entry and exit costs are higher. Decide whether the position still makes sense with that wider spread. If not, closing before the weekend avoids the extra cost.
The mistake most people make here
People often treat a crypto CFD like a coin in a wallet: they forget that the position is a contract with a daily cost and that the market runs on weekends. A Friday entry held over Saturday and Sunday can collect three nights of swap, which eats into a small move. Check the funding schedule and the weekend spread before you hold. If you would not pay that cost for a coin you own outright, do not pay it for a CFD.Check yourself
You hold 0,02 lots of BTCUSD for 4 nights. Swap is 1 USD per night per 0,01 lot. What is the swap in rand at USD/ZAR 18,4100?
0,02 lots is two units of 0,01. Swap per night = 2 × 1 USD = 2 USD. For 4 nights: 2 × 4 = 8 USD. In rand: 8 × 18,4100 = R147,28.
BTCUSD rises 2 000 points on a 0,01 lot position. What is the profit in rand at USD/ZAR 18,4100?
Profit in USD = 0,01 × 2 000 = 20 USD. In rand: 20 × 18,4100 = R368,20.
Questions that come up next
Does the broker use the same USD/ZAR rate I see on a news site
No. The broker uses its own USD/ZAR rate for the conversion. That rate includes the broker's spread on the currency conversion, so it is not the same number you see on a news site. The difference is usually small, but it changes your rand result. Two brokers can convert the same dollar profit into different rand amounts. Always treat the rand figure in your platform as the broker's figure, not the market's.
Why did my rand profit fall even though the bitcoin price went up
Your rand result depends on two prices moving at once. The first is the bitcoin price in dollars. The second is the USD/ZAR rate. If bitcoin rises but the rand strengthens against the dollar, your dollar profit buys fewer rand. The two moves partly cancel out. If the rand weakens, the same dollar profit buys more rand. You are trading bitcoin and the dollar against the rand in one contract.
Can I close a crypto CFD on a Saturday
Yes. Bitcoin trades every day, so a crypto CFD usually follows that schedule. You can open and close on a weekend. But the spread is often wider than on a weekday, so the price you buy at sits further above the price you sell at. A small move on a Saturday can be swallowed by that gap. Check the weekend spread before you trade.
If I hold from Friday to Monday how many nights of funding do I pay
You pay for three nights. Funding is charged every night, including Friday, Saturday and Sunday. The charge is based on the position size and the broker's swap rate. That rate can change, and some brokers charge more on weekends because their own hedging costs rise. The funding is part of the contract, not a fee you can avoid by closing and reopening.
Can a stop loss be filled at a worse level on a crypto CFD
Yes. A price can jump from Friday's close to Sunday's open if news breaks while most people are away from their desks. Your stop loss may not be filled at the level you set. It may be filled at the next available price, which can be further away. This is a gap, and it is one of the risks of holding over a weekend.
Is a crypto CFD the same as owning bitcoin
No. You never hold a coin, a wallet or a private key. You hold a contract that pays the difference in price. That contract has its own costs: a spread, a daily funding charge and sometimes a commission. You also never receive a coin you could spend or store. You trade the price, not the asset.
The words used on this page
- CFD
- A contract for difference. You and the broker exchange the difference in a price between opening and closing. You never own the underlying asset.
- Spot price
- The current price of bitcoin on the exchanges the broker uses. The broker takes that price and adds or subtracts its own adjustment.
- Spread
- The gap between the price you buy at and the price you sell at. A wider spread costs you more on every trade.
- Swap
- The daily funding charge for holding a position overnight. It is based on the position size and a rate the broker sets.
- Gap
- A jump in price from one level to another with no trading in between. A stop loss may be filled at the next available price, not the level you set.
- Margin
- The money set aside from your account to keep a position open. It is not a fee, but it is locked while the position runs.
What to take away
- A crypto CFD pays the difference in price, so you never hold a coin, a wallet or a private key.
- Your rand result depends on two prices at once: the bitcoin price and the broker's USD/ZAR rate.
- Weekend trading brings wider spreads, three nights of funding from Friday to Monday, and gaps that can move a stop loss.
- If you would not pay that cost for a coin you own outright, do not pay it for a CFD.