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Thread: Forex Rollover?

  1. #1
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    Forex Rollover?

    Can anybody explain what rollover fees are in Forex? I know they are the differences in overnight rates, but I still don't understand them. I saw a chart that have different values for each currency pair, why are some...

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  3. #2
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    If you e.g. open a long EURUSD, you are selling USD and buying EUR for that $ amount
    So you have to pay for your $ selling (leverage...you're "lending" money from your broker) and get the interest for your € (at least in theory) that you bought
    Depending on the rate differential and the direction of the trade the sum of interests will either be negative or positive (in theory € interest paid should be higher than $ interest owed -> positive swap for a long position)
    So for each currency pair there are two values: the swap for a long position and the swap for a short position
    If the swap is >0 you will earn money if it's <0 you have to pay for holding the position overnight
    But the broker isn't your friend and he's not interested in you holding a position only to get the positive swap...
    So some of them (most of them?) set both sides negative (with the exception of some high differentials like aud or the exotics like zar)
    Last edited by iwjw; 05-04-2012 at 07:41 PM.

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    Hi guys !!!i were to go long on one account and short on the second account on the same currency? The goal is to collect the rollover interest after a week. It seems like a strategy that's too good to be true. This forex rollover information for everyone which interested in forex...
    Last edited by Aiden; 12-17-2012 at 04:42 AM.

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    do the math, dude
    the swap you have to pay is ALWAYS more than the swap you earn
    No matter which pair, no matter which broker

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    all brokers mark up their swaps. it is a source of income for them as well whenever the retail traders rollover. therefore it is prudent not to hold your position open for far too long, expecially when you are short AUDUSD. the swaps you end up paying are amazingly high!

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