I currently have a long position of 13,000 units on NZD/CAD. Can someone explain to me why my broker is charging me -0.26 cents per day through financing? How is this calculated? I thought their interest rates were equal, so I don’t know why I’m being deducted 26 cents a day from my balance? A thorough explanation would be much appreciated. Thanks.
There are three types of interest rate exchanges for a currency swap:
The fixed rate of one currency for the fixed rate of the second currency.
The fixed rate of one currency for the floating rate of the second currency.
The floating rate of one currency for the floating rate of the second currency.
honest, I’m newbie here. sorry I didn’t answer your post. I just read and try to learn about problems and solutions from others.
Hi Anna; no problem at all; that’s the beauty of this community! Hope, now you know the tricks of swap.
Doing the math on this it still doesn’t add up. .26 times 365 = 94.9 and then when you divide that by the amount of units I have which is 94.9/13000=.0073
That number isn’t seen anywhere in the link you sent. The actual interest I’m paying per year is then -.73%. So what exactly is happening?
You mind explaining those and how they differ from each other and which one I’m currently experiencing?
I am not sure of all your data as far as trade price ETC but if you enter in a long 13,000 unit position held for 24HRS on NZD/CAD it equals -0.26.
https://www.oanda.com/forex-trading/analysis/financing-calculator
Try using this calculator.
If I am not helping I am sorry and am not trying to be a know it all. Swap rates are definitely confusing, especially in the beginning.
Hope this calculator helps…