In the XTrade online trading platform, you will be charged or credited for swap points at 00:00 server time.
The server time in XTrade is set to GMT+2 or GMT+3 in DST(Daylight Saving Time).
What is swaps?
Swap points are in another word “over night interest charge” in Forex markets.
The swap points will be charged or credited depending on the differece of the interest rate on each currency.
If an interest rate is high in the country(or the currency), some Forex Currency Pairs including the currency will have high swap charges or credit.
Unless you don’t have a swap free account, your trading account with XTrade will be subject to this swap points, and it will be processed automatically by the system at server time 00:00.
Although you will be charged/credited for swaps if you hold an open position over night(in server time), you are not allowed to trade arbitrage using the difference of swap points in different symbols or different brokers.
XTrade prohibits arbitrage trading in general, and if the broker finds that you have traded arbitrage in the trading accounts, XTrade has the right to cancel profits generated on the unauthorized trading methods.
XTrade categorize some certain methods as abusive methods such as, Snipping, Scalping, Pip-hunting, Hedging, placing “buy stop” or “sell stop” Orders prior to the release of financial data, arbitrage, manipulations or a combination of faster/slower feeds.
Although, swaps are calculated for Forex Currency Pairs by the difference of interest rate on each currency.
Swaps for Stock Index CFDs are calculated differently. The swaps charged/credited for Stock Index CFDs are basically calculated by the dividend payment(in another word, bonus payment) for shareholders.
So CFD is an OTC derivatives and you will not have the actual ownership by trading, but still you will get paid for dividend for holding Stock Index CFDs’ positions.
In this case, you will be paid for the dividend bonus if you have a long(buy) position, and get charged for that if you have a short(sell) position.
Just like other many brokers, your trading account(unless a swap-free account) is subject to Wednesday tripled swap points.
As delivery date(value date) of Forex & CFD products is “T+2”, which is transaction + 2 days.
So basically you will get charged for the swaps from 2 days before for holding positions.
This swap charge/credit happens also during weekends, but the exchange market is closed so the process does not occur in each trading account. Instead, the swap points accumulated during weekends will be all processed on Monday and reflected into trading accounts 2 days after. which is the Wednesdays.
The tripled swap charge happens when the date changes from Wednesday to Thursday, so 00:00 in Thursday at server time.
Swap free account
XTrade offers swap-free account for Islamic traders.
If you are in need to trade with interest-free account, please contact XTrade before start trading.
In case of swap free account, your account will have some more rules set by XTrade than normal accounts.
Some of main additional rules are as follows:
- If you hold an open position for a long period, XTrade may apply swaps(premiums) retroactively later on
- Hedging is forbidden in Swap-free account
- In case you have open positions until one hour before the market close on Fridays, XTrade will close all existing open positions then