Unlike our other offerings, spot forex and metals are not traded on a centralized exchange within the underlying market. This absence of a central reference point means prices are typically calculated through a variety of OTC (over-the-counter) counterparties, from investment banks to other brokers. Consequently, these prices are subject to variable spreads based on current market conditions. At Capital.com, we aggregate these prices and add a modest additional spread (our transaction fee) dependent on the market.

Example:

Let's examine how we price EUR/USD at a specific moment. We compile pricing from three counterparties at 1.12345/1.12355, 1.12350/1.12360, and 1.12348/1.12358, yielding a consolidated price of 1.12348/1.12358. We then apply a spread of 0.00006 to determine the Capital.com price as 1.12345/1.12361.

We establish our cryptocurrency prices by sourcing buying and selling rates from multiple reputable cryptocurrency exchanges. By aggregating these prices, we create a consolidated mid-price that serves as the foundation for our own spread. This methodology ensures a more stable spread throughout different times of the day, giving you a consistent trading experience.

Example:

Let's illustrate how we price Bitcoin (BTC) at a hypothetical moment. We gather current prices from three exchanges: $99,500/$99,700, $99,550/$99,750, and $99,520/$99,720. After calculating the mid-prices and aggregating them, we arrive at an average price of $99,623. We then apply a spread of $200* to establish the Capital.com price at $99,523/$99,723.

When it comes to our share pricing, we utilize the underlying exchange's buying and selling prices for each stock and apply a small markup. This means you're trading based on the 'true' market prices, with just a minor adjustment for our fee. This approach allows our pricing to adapt to fluctuations in the underlying market spread as liquidity changes.

Example:

Consider a physical stock in the underlying market with a selling price of $99.95 and a buying price of $100.05. When trading this stock with us as a derivative (e.g., CFD), we'll implement a fixed markup of $0.05 on either side, resulting in our sell price of $99.90 and buy price of $100.10, which gives us a spread of 0.20. If the underlying market widens to 99.80/100.20, our fixed markup of 0.05 moves our price to 99.75/100.25, thereby adjusting our spread to 0.50.

Our cash index pricing is derived from the mid-price provided by our price sources, with adjustments made for spreads. We set our index spreads based on specific times throughout the day to reflect changes in the underlying market liquidity. Typically, our spreads are widest when the underlying futures market is closed and tightest during peak trading sessions. Since cash indices are tradable in the underlying market, many price providers, including ours, establish their cash prices by taking the futures price and adjusting it for fair value—taking into account expected dividends of the constituent stocks and relevant market interest rates.