Cash Index CFD vs Futures Index CFD
Also known as: spot index CFD, cash index, futures index CFD, index CFD types
What is it?
Index CFDs come in two forms that look identical on a chart and behave differently in an account: a cash CFD tracks the index right now and never expires, while a futures CFD tracks a dated futures contract and does. The difference shows up as cost and calendar. A cash index CFD - the US 500 or Germany 40 quoted around the spot level - has a tighter spread, typically under a point on the majors, and charges an overnight financing adjustment every night you hold it. Hold a $50,000 notional position for three weeks and that nightly charge is the dominant cost of the trade.
Cash index CFD vs futures index CFD
Cash index CFD
- Quoted around the spot index level
- Tighter spread, often under a point on the majors
- Charged an overnight financing adjustment every night held
- Never expires, so no roll to manage
- Dividend adjustment applied when constituents go ex-dividend
Cheaper for intraday and multi-day trades, where few nights are paid.
Futures index CFD
- Quoted on a dated contract, usually away from spot
- Wider spread that varies as expiry approaches
- No nightly financing charge at all
- Expires - the broker closes or rolls the position
- Expected dividends already priced into the contract
Cheaper over weeks, where one roll replaces many nightly charges.
A futures index CFD quotes the dated contract instead, which usually trades at a different level from spot, has a wider spread, and pays no nightly financing - but it expires, and when it does your broker either closes the position or rolls it into the next contract, adjusting your account for the price difference between them. Which one fits follows from the holding period. Intraday and multi-day trades usually favour cash, where the tight spread matters and few nights are paid. Positions held for weeks or months usually favour futures, where one roll costs less than twenty overnight charges.
The trap is comparing the two prices directly: a futures index CFD quoting 120 points above the cash index is not a better entry, it reflects financing already priced into the contract, and dividends are handled differently in each. Read the contract specification before assuming a level is comparable. Your capital is at risk. See /risk-warning.
Why it matters: The two quote different prices for the same index, and the choice decides whether you pay a nightly financing charge or a periodic roll - the dominant cost on any held position.
Holding cost and expiry behaviour differ completely between the two, so the same trade idea produces a different net result depending on which instrument carries it.
Real-world example
A $50,000 US 500 cash CFD held for three weeks pays fifteen nightly financing charges, while the equivalent futures CFD pays none and instead rolls at contract expiry.
How SignalBots handles it
SignalBots signals name the instrument they are calculated on, so an index level is read against the same contract you would actually trade rather than a differently priced one. See /risk-warning.
Pro tip
Match the instrument to the holding period - cash for days, futures for weeks - and price the decision by multiplying the nightly charge by the nights you expect to hold.
Common pitfalls
Reading the futures quote as a better or worse entry than cash. The gap between them is financing already priced in, not an opportunity.
Frequently asked questions
Why is the futures index price different from the cash index?
Because it prices the index at a future date, so the cost of carrying the position to that date and the dividends paid before it are already embedded in the quote. The gap converges toward zero as expiry approaches.
What happens at expiry on a futures index CFD?
The broker either closes the position at the settlement level or rolls it into the next contract, applying a cash adjustment for the price difference so the roll itself is value-neutral before costs.
Which one has the tighter spread?
Cash index CFDs are normally quoted tighter, often under a point on the major indices, because that is where the underlying liquidity concentrates. Futures CFDs are usually wider and vary as expiry approaches.
How do dividends work in each?
On a cash index CFD brokers typically apply a dividend adjustment when constituent shares go ex-dividend. On a futures CFD the expected dividends are already reflected in the contract price, so no separate adjustment is applied.
Which should a swing trader use?
For positions held over weeks, the futures CFD usually costs less because one roll replaces many nightly charges - but check the wider spread against your entry frequency before switching. Your capital is at risk.
Trading involves substantial risk of loss. Historical and backtested results do not guarantee future performance. Read the full risk warning.
