iFOREX, Change of Overnight Financing fees for Forex Exotic pairs
High volatility expected for Turkish Lira pairs and Swap points will be updated.
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Due to recent increased volatility in the Turkish Lira, please note the upcoming changes regarding Overnight Financing fees related to exotic pairs of currencies, which will be reflected in iForex and Vestle’s trading conditions, effective as of 01/04/2019.
Whereas the mark-up for currency pairs is 0.75%, please note that exotic currency pairs might necessitate higher markup levels that may differ between Long (Buy) and Short (Sell) positions.
For illustration purposes please see the following example that involves a situation where the Inter-bank Rate difference is HIGHER than the markup and the Long and Short markups are different.
In such cases, your account will be debited when you go Long and credited when you go Short:
- Instrument = EUR/TRY (Euro vs. Turkish Lira)
- EUR (base currency) 3M interest rate (annualized) = -0.37% = -0.0037
- TRY (other currency) 3M interest rate (annualized) = 22.75% = 0.2275
- Interbank Rates difference = 23.12% = 0.2312
- Long Markup = 0.75% = 0.0075
- Short Markup = 14.00% = 0.14
- Deal Amount value expressed in the other currency = 620,000 TRY (100,000 EUR at Current Closing Rate of
Overnight Financing Percentage when you Buy (Long Positions):
Overnight Financing Percentage = − (0.2275 − (−0.0037) + 0.0075 / 360 ) = −0.000663 = −0.0663%
Overnight Financing Amount = 620,000 × (-0.000663) = -411 TRY, meaning 411 TRY charge per day (≅80 USD)
Overnight Financing Percentage when you Sell (Short Positions):
Overnight Financing Percentage = (0.2275 − (−0.0037) − 0.14 / 360 ) = 0.000253 = 0.0253%
Overnight Financing Amount = 620,000 × (0.000253) = 157 TRY, meaning 157 TRY credit per day (≅30 USD)
Please make yourself aware to the applicable fees before placing an order.
For more information or inquiries regarding to the change above, please contact iForex support team from the Official Website.