I need to change the margin settings on my account so that I can earn interest on certain of my positions that I inevitably end up holding overnight and at the moment, because of my margin settings, I am paying interest when I could be earning interest.
My broker is quite happy to make the change (even with currently open positions) but I just need to confirm something before I instruct them to go ahead.
My current margin setting is $50.00 USD per lot and my leverage is 200:1.
If they change my margin setting to $200.00 USD per lot then my leverage will change to 50:1.
My question is: how is this going to affect my buying power? In my mind it is exactly the same thing i.e. $50.00 USD per lot with 200:1 leverage is exactly the same as $200.00 USD per lot with 50:1 leverage. Am I correct?
Basically (all things being equal and my deduction above being correct) it will mean that a) I can earn interest on certain positions (and yes I know I will pay on others but at the moment I pay regardless) and b) it saves me from clicking four times to buy four lots of $50.00 USD (which is what I have started doing now anyway to simulate buying $200.00 USD lots in anticipation of having my margin setting changed anyway).
Your prompt response would be greatly appreciated - the interest is killing me.
By the way - who pays this interest to us? Is it the broker? And if it is the broker - although that is jolly nice of them - why do they do this? I mean if they did not pay us interest we would still have our accounts open would we not?