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#1 27-04-2015 13:52:09

johnedward
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From: Paris - France
Registered: 21-12-2009
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New page on Forex-Central.net: what are forex swaps and rollovers?

New page on Forex-Central.net: what are forex swaps and rollovers?


http://www.forex-central.net/img/rollover.jpg
Transactions that are done with cash (spot forex) with foreign exchange brokers are subject to positive or negative interest charges (currency swaps) if the positions are held at the time of the rollover at 22:00 (GMT time).

For example, for the EUR/USD pair, the credit or debit that is applied to a trader's account is determined by the difference between the interest rate of the base currency (EUR) and the counter-currency (USD).

To calculate the interest, we need to know the short-term interest rates of the two currencies and the amount of currency that was bought. For example, let's say that the investor holds a long EUR/USD position (10,000, or 0.10 lots) and that short-term interest rates are 0.05% for the euro and 0.25% for the US dollar...

Arrow Read the rest of the article on swaps and rollovers


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