swap-point-overnight-financing-charge-calculation swap-point-overnight-financing-charge-calculation

All positions held at 17:00 ET will be subject to a financing adjustment, to reflect the change in Spot date.

Your broker does not close and open the positions to account for these swap rates. Instead, they may simply apply the equivalent financial consideration to the position if it were rolled over.

If you are holding the currency with the higher rate of interest, you will generally receive financing.

This rate will be determined by the current institutional swap rate up to a maximum of .5 ticks, if you have a short position and minus a maximum of .5 ticks, if you have a long position.

If you are holding the currency with the lower rate of interest, you will generally pay financing.

This rate will be determined by the current institutional swap rate plus a minimum of .5 ticks, if you have a long position, and minus a minimum of .5 ticks, if you have a short position.

Below is the formula to show how the financing amounts are calculated.

Position Types Formula
For a short position F= S * V * P
For a long position F= S * V * P * -1

F= Finance charge/credit

S= Swap Rate

V= Number of lots

P= Pip value in account base currency

When and What happens during ‘ROLLOVER’

Please note that during Rollover, which occurs at 5pm New York time (which is 00:00 MT4 server time) when we move from one trading day to the next, Liquidity Providers will remove their pricing from the market and reinstate with a new value date.

This means that the market becomes highly il-liquid for up to 5 minutes either side of this rollover period where spreads tend to widen and execution may be challenging where slippage can occur.

In severe instances of il-liquidity you may not be able to execute at all during this 10 minute period during rollover until the liquidity returns.

For the list of MT4 and MT5 brokers, please visit the page below.

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