EFXglobal Offers Competitive and Transparent Swap Rates on Your Overnight Positions
An overnight position at EFXglobal represents any open short or long position that extends past the end of day trading hours, rolling over to the next trading day. This rollover is also referred to as a ‘Swap Rate’ and it is the interest paid for holding a position overnight. Rollovers determine a daily valuation for open transactions and finance charges are calculated for the position as every Forex trade involves two different currency pairs with two different interest rates.
If the interest rate on the currency you bought is higher than the interest rate of the currency you sold, you will earn on the swap rate (positive rollover).
If the interest rate on the currency you bought is lower than the interest rate on the currency you sold, you will pay the swap rate (negative rollover).
Rollover may add an extra cost or a profit to your trade depending on the direction of the movement and the prevailing interest rates.
How are Swaps or Overnight Positions Calculated?
The formula for calculating swaps is as follows:
Pip value (X) Number of lots (X) Swap rate (X) Number of nights (=) Swap Value
Swap values are provided in pips and are reflected in the contract specifications.
The following example is a short GBP against USD for one night:
$10 (pip value for 1 lot of GBP/USD) x 4 (number of lots) x -0.35 (short GBP/USD) x 1 (number of nights*) = -$14
Rollover Booking Times
EFXglobal does not close your positions at the end of the trading day and re-open positions for you the next day, instead we debit or credit your trading accounts for positions held open overnight, depending on current interest rates.
The beginning and end of the forex trading day according to EFXglobal servers is 22:00 GMT. Any positions which are still open at 22:00 GMT are subject to rollover and will be held overnight. If you open a position at 21:59 you will be subject to rollover that will take place at 22:00 GMT. Positions opened at 22:01 are not subject to rollover until the following day at 22:00 GMT.
Weekends and Holidays:
Most banks across the world are closed on the weekends, however banks still apply interest for Saturday and Sunday. To account for weekend interest, the forex market books three days of rollover on Wednesdays.
Holiday rollover takes place when any of the traded currencies has a major holiday.
Holiday rollover adds an extra day of rollover two business days before the holiday.