Charges

Hi everyone,

I have a question regarding charges, if there is any broker charges.

If I bought a lot consisting of 50,000 units of USD/CAD at 1.05978 and set my profits (+20) and set my lost way up at (-50), so hopefully the currency will go up at the profit level I set it at, but this might take a day or weeks for the USD to do so. so does the broker charge me for having the account active for 24/7, weeks, even on days (friday-sunday) that the market is close?

Any insight on this would be great, thanks!

Hi Silva27,

You will either get paid or paid for the active position. That will depends on the interest rate different of the currency pair that you are trading. 

As for your question on whether interest is charge or paid during weekend. I have ask my broker and they said for any position that I have open on wednes will be charge or paid three days interested. that is because they need two days for forex settlement.

Hope this help. :smiley:

Regards,
BabyTrader

Below is the interest calculation from my broker.

For Foreign Exchange transactions, adjustments to reflect the relative interest rates of the currencies concerned are calculated and posted to the client’s account daily. Interest adjustments are calculated as follows:

A = V x R / 360

Where:

V = the current value of the position in the second currency. This is equal to:
Number of contracts x Contract size x Spot exchange rate

R = a percentage rate which reflects the overnight interest differential between the two currencies. In each case, the individual interest rates used to calculate R will be a maximum of one percentage point above or below the central market rate for the currency concerned

A = the amount of the daily interest credit or debit

If the first currency has a higher interest rate, then you are credited interest for running a long position and debited interest for running a short position.

If the first currency has a lower interest rate, then you are debited interest for running a long position and credited interest for running a short position.

A daily interest adjustment is calculated for any position opened before 22.00 that is still open after 22.00 (London time).

Note: For any position opened before 22.00 Wednesday that is still open after 22.00 Wednesday, the daily interest credit or debit will be made for three days as opposed to one. This three-day adjustment covers settlement of trades over the weekend period.

Thanks babytrader.

Check with your broker on this, the calculation method is different with broker to broker.

An example is Crown forex, they don`t charge or pay for holding open positions overnight, doesnt help if you trade carry trade pairs, but say if your shorting the gpbjpy means your not paying whilst your waiting for it to drop either, has its advantages and disadvantages!

N