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April 6, 2016

Question:What is rollover condition for CFDs & Forex on FXnet Trader platform?

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Answer:

All positions on Forex currency pairs and Spot(Precious Metals) are subject to rollover everyday.

But Indices, Commodities, Oils and stock CFDs are not applicable to rollover when the expiration date arrives.

Forex and Precious Metals

Forex currency pairs and Precious Metals are offered by real exchange market by its liquidity providers and they are available 24/5.

You can hold positions of Forex pairs or Precious Metals as long as you want and there is no expiration dates for the trading instruments.

But there will be swap points(over night charges) occurs, when you hold the positions over night.

It is an interest to pay, or to be paid, only for the open positions you hold through server time 00:00.

There is no swap points to occur if you close the positions before midnight in the server time.

Commodities, Oils and Gas

Commodities other than precious metals, such as oils and gas are subject to each expiration date in the market.

Each expiration dates are different and it normally comes every 1 – 3 months.

In case of these trading instruments, there is no roll-over so all open positions will be closed when the expiration dates.

FYI some commodities expiration dates are 10 business days prior to the underlying contract’s expiration.

Index(indices)

Indices instruments are also subject to each expiration date.

The expiration dates vary every time and symbols are normally it is every 3 months.

So if you have not closed any positions of indices on the day of expiration, iForex will close the position at the last quoted price in the platform.

You can find the full market calendar in the contract specification in the official website of iForex.

FYI the expiration dates for indices are 2 business days prior to the underlying contract’s expiration.

iFOREX Official Website

Stock CFDs

Stock CFDs are subject to over night charges(over night financing) and each corporate actions.

Swap points(overnight financing)

As Stock CFDs are margined product, there will be an interest adjustment every night.

The interest adjustment is made at 00:00 server time and it is paid, or to be paid, according to the relevant interbank rate plus 2.5% mark-up.

The calculation formula is as follows:

For long positions

Overnight financing = (Number of Shares * Bid Price) * (Interest Rate + 2.5)/360

For short positions

Overnight financing = – (Number of Shares * Ask Price) * (Interest Rate – 2.5)/360

Corporate Actions

Corporate Action is a certain event which affect a public company’s shares value.

iForex will close all open positions of Stock CFDs when any events which materially affects or may materially affect the shares’ price,

For example, distribution of dividends, consolidation, split, rights offering, material company announcements, takeovers, mergers, insolvency etc.

You can find the next cash dividend day in the contract specification.

Swaps are tripled on Wednesdays

For Forex currency pairs and Precious Metals, swap points occurs every night, and the charge is triples every Wednesday.

As the settlement day of Forex and Metals are T + 2(2 days after the transaction), the overnight charges accumulated over weekends will be calculated and settled 2 days after the market open, which is the Wednesdays.

Why T + 2 ?

This was because all transactions were placed on the paper some time ago, and they had to take a few days to actually settle the transaction after investors paid/sold products.

It was T + 5 before and now it is T + 2.

Overnight financing is tripled on Fridays

The overnight financing charged/paid for Stock CFDs are tripled every Fridays, as it covers the entire weekends periods.

The overnight financing will be simply tripled on Fridays.

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