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Introduction to Rollover

  • Introduction to Rollover / Swap Charges

If you want to change / expand the settlement date of any of your opened trading positions, the process is simply named as rollover or swapping. The delivery of most the currency pairs trading is required to take two days after the transaction date of that currency pair. However, the settlement period of any opened position is actually artificially extended by one day. You agree to close your opened position at the closing rate of the market of that particular day and open it again on the opening rate of the next day.

Rexor Investments also offers rollover / swap option to it clients. We also offer rolling spot forex. In general, all your trades does not involve physical delivery of any currency pair you traded with any broker. Therefore, all of your opened currency positions will be automatically rolled over (carry forwarded) to new value date. This process also involves swap charges or credit. You can get complete details on swap charges in our rollover/interest policy page.

The interest rate differential of the two involved currencies in your trade, becomes the base of calculating the rollover cost / swap charges. The interest rates in the USA and EU are 4.5% (per annum) and 5.25% (per annum) respectively. Every trade you make by involving one of these currencies will make situation like this - borrowing one currency allows buying other. For example; you open a buy position for EURUSD with 1 lot size, it means you borrow USDs for 4.5% (per annum) and earn profit on Euros for 5.24%.

Detailed Explanation:

If you have an ask (also commonly known as buying) position and the other currency in the pair you are trading has a lower overnight interest rate than the first currency of your pair, then you generally get a gain. If you have a bid (also commonly known as selling) position and the other currency in the pair you are trading has a lower overnight interest rate than the first currency of your pair, then you generally lose the difference. If you have opened a buy (also named as asking price) position and the other currency in the pair you are trading has a higher overnight interest rate than the first currency of your pair, then you generally lose the difference. If you have opened a bid position (also known commonly as sell position) and the other currency in the pair you are trading has a higher overnight interest rate than the first currency in of your pair, then you generally get a gain.

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