Fellow Traders,
I just realized that the interest rate went down for the USDINR pair- amongst other pairs:17:. After investigation, Oanda told me that they have to adjust rates as provided to them by other banks. So basically, even when the Central Bank rate is the same(for almost last 6 months), you still take a hit in terms of interest earned on the position based on brokers hedging !!! So indirectly- u r taking the risk and paying them as well for that!! On top of it, there is a premium( you are not getting the actual interest(read lesser) being paid out by the respective CentralBank). Thats a frustrating position to be in and I wanted to know if others have faced same scenario and also if anyone has any pearls of wisdom/experience to share
I would like to invite opinion and advice if you have experience trading a carry trade pair through ECN. Things that are bugging me-
- Will ECN pay a higher rate (closer to the actual differential between the pair)?? :29:
- How will the pay the interest- on a daily basis or annual or some other timeframe?
Kindly share your experience and suggestions.
Thanks
AKS