Forex Rollover?

[Rey Nuevo]

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...

[iwjw]

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)

Edited May 4, 2012 by iwjw

[Aiden]

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... Edited December 17, 2012 by Aiden

[iwjw]

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

[Kristianto]

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!