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Overnight Positions

What is a "Rollover" and how is it calculated?

Rollover is the fee which is based on the swap rate for the underlying currency pair, and is accrued or charged at midnight if you have an open position which has to be transferred to the next day.

It is you who decides how long to keep your position open. Please note that the swap points can be positive or negative in value. In the first instance, the rollover is accrued (added) to your account, while in the second case it is deducted (withheld).

The amount you will pay or receive for an open position depends on the currency pair you trade, since the transaction with any currency pair is a purchase of one currency and a sale of the other.

Rollover = (Swap rate/10,000) × Position × Number of days

When JPY is participating in the currency pair:

Rollover = (Swap rate/100) × Position × Number of days

In this way, the sum is in the second currency of the currency pair. If the currency of your account is different, it needs to be recalculated in the currency of the account through conversion of the corresponding close price for this currency.

Example: You close a "Buy" transaction for 100,000 EUR/USD (100 lots). This means that you are buying 100,000 EUR, and selling the equivalent in USD. This is called a "long" position. Conversely, if you close a "Sell" transaction for 100,000 EUR/USD, this means you are selling 100,000 EUR, and buying its equivalent in USD. This is called a "short" position.

Should you decide to retain the long position of 100,000 EUR/USD for the next business day, you accumulate interest on the 100,000 EUR you bought, while you pay interest on the USD equivalent you sold.

Should you decide to retain the short position of 100,000 EUR/USD for the next business day, you accumulate interest on the equivalent in USD you bought, while you pay interest on the 100,000 EUR you sold.

Interest rates are compliant with the best practices of the global financial institutions.

If the interest on the currency you bought exceeds that of the one you sold, you will receive the difference (the rollover amount).

Conversely, if the interest on the currency you bought is lower than that of the one you sold, you owe the corresponding difference.

Rollover is accrued on the end position which is transferred from the previous day.

Please note that foreign exchange orders are executed with a spot value date (T+2 business days), i.e.:

  • The spot value date for a position opened on Monday (04.06.2012) is Wednesday (06.06.2012). Likewise, closing the same position on Tuesday (05.06.2012) will have a spot value date on Thursday (07.06.2012). Therefore, the rollover fee in your daily statement for Tuesday (05.06.2012) will appear as a charged amount for the transfer (rollover) of this position for a period of one business day (from 06.06.2012 to 07.06.2012).
  • The spot value date for a position opened on Wednesday (06.06.2012) is Friday (08.06.2012) Likewise, closing the same position on Thursday (07.06.2012) will have a spot value date on Monday (11.06.2012). Therefore, the rollover fee in your daily statement for Thursday (07.06.2012) will appear as a charged amount for the transfer (rollover) of this position for a period of three business days (from 07.06.2012 to 11.06.2012).
  • The spot value date for a position opened on Friday (08.06.2012) is Tuesday (12.06.2012) Likewise, closing the same position on Monday (11.06.2012) will have a spot value date on Wednesday (13.06.2012). Therefore, the rollover fee in your daily statement for Monday (11.06.2012) will appear as a charged amount for the transfer (rollover) of this position for a period of one business day (from 12.06.2012 to 13.06.2012).

Note: Views expressed here are for education purposes only and are not the views of Deltastock or its employees. These views are not personal recommendations or investment advice. Any quotes of financial instruments displayed on this page are indicative only and do not reflect the current market situation. You may wish to seek independent advice before entering into transactions.