Overnight Positions
FX Swap Rates - FX Positions
Held Until their Value Date
Spot FX positions held at the end of the business day before
their Value Date will be rolled over to a new Value Date on a
Tom/Next basis. As part of the rollover, positions are subject
to a swap charge or credit based on the LIBOR/LIBID interest
rates of the two traded currencies with an added notional markup.
Interest on Unrealised
Profit/Loss
In addition to the FX swap charge or credit, an interest
component of LIBOR/LIBID will be credited or debited at rollover
for any unrealised profit or loss on the position.
These FX swap rates are for indication purposes only and may
differ slightly from those applied to your FX trading account.
You can determine the swap rate for a particular product by
logging into the MetaTrader 4 terminal and right clicking
anywhere in on the Market Watch window and then clicking
Symbols. Next select the product you wish to check from the list
and then click Properties. You will find the swap rates for both
long and short positions on the window that appears.
FX Interest
Rollover - Financing your FX positions held overnight (known as
interest rollover or "TomNext")
FX trading strategies involve the use of interest rate
differentials between the currencies in a pair and those
positions that are rolled over from one trading day to the next
will incur financing based upon these interest rate
differentials. You pay interest on the currency that you sell
and receive interest on the currency that you buy.
The interest rate applied is 'TomNext' which is an abbreviation
for 'Tomorrow' or the 'Next' business day because the first
value date is tomorrow or the next business day. The TomNext
price reflects the applicable interest rate between
Tomorrow/Next and the "Spot value" date. At (07:00) 07:00am
(00:00 MT4 Server time) Sydney Time (Standard FX market
Value-Date change time) each day. Star Financial Markets settles
all spot positions by closing the trade at the current market
rate and re-opening it for the following day's spot date at a
rate that will reflect the interest rate differential.
FX Example:
You are long the GBP/USD pair.
You will receive interest on the GBP and pay interest on the
USD.
If GBP has a higher interest rate than the USD, you will receive
a net interest payment but if GBP has a lower interest than the
USD, you will pay out a net interest payment.
