13

Categories

May 16, 2016

Question:What is "Roll Over" and "Overnight Financing (Swap Interest)"?

Answer:

If you trade Forex on a “spot” basis, all trades settle two business days from inception, as per market convention.

The settlement date is referred to as the value date.

Many Online Forex Brokers offer “rolling spot” Forex.

This means they don’t arrange physical delivery of currencies and therefore, all positions left open from 23:59:45 to 23:59:59 (MetaTrader time, EET) will be rolled over to a new value date.

As a result, positions are subject to a swap charge or credit.

Please read FXPro’s rollover/interest policy to find out more.

FxPro Official Website

The rollover cost is based on the interest rate differential of the two currencies.

Let’s assume that the interest rates in the EU and USA are 4.25% and 3.5% per annual respectively.

Every currency trade involves borrowing one currency to buy another.

If you have a buy position of 1.0 lot in EURUSD, then you earn 4.25% on your euros and borrow US dollars at a rate of 3.5% per year.

How Swap (Roll Over) works?

  1. If you have a long position (buy) and the first currency in the currency pair has a higher overnight interest rate than the second currency, then you receive a gain.
  2. If you have a short position (sell) and the first currency in the currency pair has a higher overnight interest rate than the second currency, then you lose the difference.
  3. If you have a long position and the first currency in the currency pair has a lower overnight interest rate than the second currency, then you lose the difference.
  4. If you have a short position and the first currency in the currency pair has a lower overnight interest rate than the second currency, then you receive a gain.

Check the Latest Swap Points

Some Notes for investors

If you open and close a position before 23:59:45 (MetaTrader time, EET) you will not be subject to a rollover.

The act of rolling the currency pair over is known as tom.next, which stands for tomorrow and the next day.

When you roll an open position from Wednesday to Thursday, then Monday next week becomes the value date, not Saturday.

Therefore the rollover charge on a Wednesday evening will be three times the value indicated on the rollover/interest policy page.

All Forex Brokers

  • IFC Markets
  • FxPro
  • IronFX
  • Axiory
  • FBS
  • Land-FX
  • MyFX Markets
  • Titan FX
  • Traders Trust
  • XM
  • LMFX
  • FXDD
  • ForexClub
  • KVB Kunlun
  • Tradeview
  • EightCap
  • FXOpen
  • HotForex
  • FXGiants
  • LQDFX
  • Fortrade
  • CM Trading
  • InstaForex
  • FXPRIMUS
  • ForexMart
  • Valutrades
  • AvaTrade
  • Yadix
  • RFXT
  • easyMarkets
  • JustForex
  • Swiss Markets
  • FXTM
  • HYCM
  • FP Markets
  • SimpleFX
  • IC Markets
  • Evolve Markets
  • Tickmill
  • Markets.com
  • Z.com Trade
  • UFX
  • Anzo Capital
  • LiteForex
  • 4xCube
  • OctaFX
  • Tifia
  • XTB
  • AAAFx
  • NordFX
  • FXGlory
  • Capex
  • ClickTrades
  • TopstepFX
  • HotForex ZA (South Africa)
  • XMTrading

All Crypto-Currency Exchanges

  • CEX.IO
  • HitBTC
  • Paxful
  • BitMEX
  • C-CEX
  • Binance
  • Cryptopia
  • YObit
  • Wisebitcoin
  • Bibox
  • BKEX
  • CoinPark
  • CoinEx
  • IRONX
  • CoinField
  • bybit
  • Bitpanda

This website uses cookies

By using our site, you acknowledge that you have read and understand our Privacy Policy (Cookie Policy), and our Terms of Service.