Interest received and paid

Also seen as: financing cost, margin interest, carry

What Fincanva charges interest on

Interest paid arises whenever a strategy borrows: it uses leverage (borrows capital to hold more than its cash) or holds a short position (borrows the securities it sells). Each is priced as a spread over the broker's base rate, set by two fields in your simulation assumptions — "Borrowing rate markup" ("Spread added above the broker rate when borrowing capital.") and "Short rate markup" ("Spread added above the broker rate when shorting securities."). Those spreads are the interest-rate markups; interest paid is only applied when the Costs assumption is on.

Defaults in Fincanva

• The P&L breakdown carries two bands — "Interest received" on the gains side and "Interest paid" on the costs side — so the two directions are never netted into one figure.
• Interest paid is charged only when the Costs simulation assumption is on. That assumption is off by default for every account, so interest paid reads zero until you switch costs on.
• Uninvested (idle) cash rides on the same assumption as interest paid: with the Costs assumption on it earns interest, which is why a wide cash band on the capital chart is not simply lost ground; with that assumption off — its default — it earns nothing, so both bands read zero. The rate it earns and the basis it is accrued on are Fincanva's own; they are not published.

Worked example

A strategy runs at 1.5× leverage for a month, borrowing 0.5× its capital to hold more exposure than its cash covers. For the days it holds that borrowed portion it pays the broker's base rate plus your "Borrowing rate markup" on the borrowed amount. That financing cost lands on the Interest paid band and pulls the net Portfolio line down for the month — the price of the extra exposure. Turn the Costs assumption off and the band drops to zero, which is why cost-free results flatter a leveraged strategy.

These figures describe what a strategy would have done on historical data, not what it will do. Fincanva provides no financial advice — see Is this financial advice?.