Overnight Positions

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Ultra-fast Trade Execution with No Re-quotes or Rejections

Competitive Swap rates

Transparent Swap Rates

3-day rollover strategy

Following current interest rates

7 Asset Classes – 10 Trading Platforms – Over 1000 Instruments. Trade Forex, Individual Stocks, Commodities, Precious Metals, Energies, Equity and Thematic Indices at ZenithFX

Keeping Your Positions Open Overnight

Rollover interest may be applied to positions that are left open overnight. When it comes to forex instruments, the amount credited or charged is determined by the difference in exchange rates between the two currencies that are being traded as well as the position (long or short). The amount credited or charged in the case of stocks and stock indices is determined by whether a short or long position has been taken.

Please be aware that only cash instruments are eligible for rollover interest. There are no overnight fees for futures instruments, which have an expiration date.

About Rollover

Extending the settlement date of an open position—that is, the deadline for settling a completed trade—is known as rollover. The forex market stipulates that all spot trades must be settled within two business days, implying the actual delivery of currencies.

Since there is no physical delivery while trading on leverage, all open positions must be closed at the end of the day (22:00 GMT) and reopened the next trading day. As a result, the settlement is delayed by one trading day. We refer to this tactic as rollover.

A swap contract is used to agree on rollover, which has an impact on traders’ profits or losses. Depending on the prevailing interest rates, ZenithFX just debits or credits trading accounts for positions held open overnight rather than closing and reopening them.

Rollover Policy

After the daily bank cutoff time of 22:00 GMT, ZenithFX debits or credits clients’ accounts and manages rollover interest at competitive rates for all open positions. Banks continue to compute interest on any position held open over the weekend, even though there is no rollover on Saturdays and Sundays when the markets are closed. In order to close this time difference, XM charges a 3-day rollover fee on Wednesdays for Spot Metals (Gold and Silver) and Forex, and on Fridays for CFDs on Stocks, Cash Indices, and Cash Energies.

Calculating Rollover

For Forex and Spot Metals (Gold and Silver)

 

Rollover rates for positions on forex instruments and spot metals are charged the tomorrow-next day (i.e. tomorrow, and the next day) rate, including the XM mark-up for holding positions overnight. Tom-next rates are not determined by XM but are derived from the interest rate differential between the two currencies that a position was taken in.

 

Example:

Assuming that you trade in USDJPY and that the tom-next rates are as follows:
+0.5% for a long position
-1.5% for a short position
In this scenario, the interest rates in the USA are higher than in Japan. A long position in the currency pair held open overnight would receive +0.5% – the XM mark-up.
Conversely, for a short position the calculation is -1.5% – the XM mark-up.
 

More generally, the calculation is as follows:

Trade size X (+/- tom-next rate – the XM mark-up)*
 

Here the +/- depends on rate differentials between the two currencies in a given pair.

*The amount is translated to currency points of the quote currency.

 

For Stocks and Stock Indices

 

Rollover rates for positions on stock and stock indices are determined by the underlying interbank rate of the stock or index (for example, for an Australian-listed security, that would be the interest rate charged between Australian banks for short-term loans), plus/minus the XM mark-up on long and short positions respectively.

 

Example:

Assuming that you trade in Unilever (a UK-listed stock) and that the short-term interbank rate in the UK is 1.5% p.a., for a long position held open overnight, the calculation is as follows:
-1.5%/365 – the XM daily mark-up
Conversely, the calculation for a short position is +1.5%/365 – the XM daily mark-up.
 

More generally, the calculation is as follows (with daily rates as seen below):

Trade size X closing price X (+/- short-term interbank rate – the XM mark-up)
 

Here the +/- depends on whether one has taken a short or a long position on an instrument.

Booking Rollover

One observes the start and finish of a trade day at 22:00 GMT. Any open positions at precisely 22:00 GMT will roll over and remain open for the duration of the day. Opening a position at 21:59 will result in a rollover at 22:00 GMT, however positions opened at 22:01 are not subject to rollover until the next day. An hour will pass before a credit or debit appears on your account for each position that opens at 22:00 GMT.

Volatile or Illiquid Market Trading

ZenithFX strives to give you with the finest service possible, especially in volatile market situations, by executing orders at the best available market price. This is made possible by its awareness and business ties with many liquidity providers.

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