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May 18, 2016

Question:How to earn Interest Swap Points on Forex trading on MT4?

Answer:

IronFX UK is one of the most competitive brokers with regards to swap rates in the Forex market.

Their overnight swaps are Institutional Grade and are on par with Tier 1 liquidity providers.

A ‘Swap’ or a ‘Rollover’ is the interest paid or earned for extending a position at the end of the day (4:59pm ET) without settling.

The swap rate converts net currency interest rates, which are given as a percentage, into a cash return for the position.

Based on the interest differential, a trader purchasing a currency with the higher of the two interest rates will be credited and vice versa.

Swap rates can potentially generate extra profit or loss to one’s trade.

Take advantage of the global markets today!

IronFX Official Website

IronFX UK will apply a three-day swap on Wednesday evenings (4:59pm EST) to account for weekend rollovers.
Position Size: 1 standard lot, equal to 100,000
AUD Account: i.e. Converted to the AUD
Calculation Formula: Position Size * Pip Value * Swap Pip Rate * AUD Conversion Rate
Note: the following is an example that illustrates how to calculate the swaps for EUR/AUD.

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Example of Swap Point Calculation

An investor has a short 500,000 EUR/AUD at a rate of 1.2500.

The EUR interest rate is 0.75%, or a daily rate of 0.002%, and the AUD is 3% or a daily rate of 0.0083%.

The interest on the EUR is (500,000 * 0.002%) 10.00 EUR; the AUD costs (625,000 * 0.0083%) 51.875 AUD.

Converting the EUR to AUD, 1*1.2500 = AUD 12.5.

The net AUD amount is 12.5 – 51.875 = – 39.375, which is divided by the 500,000 position.

On a short EUR/AUD position, the rollover generates 0.00007875, or 7.875 pips.

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