Hi, I’m CaveDog and I’ve been trading for roughly two weeks now after trading a demo account for a month. Long story short (not a trading pun), I’ve left open two positions over the weekend and I am wondering how much I will be charged in interest rollovers. This is how much I’ve piece together on my own, just scratching stuff on the Cave walls.
AUD/USD short: (AUD = 4.5%, USD = 0.25%) Does this mean to calculate how much I owe I take the difference 4.25% and apply it daily to the amount of the lot I took out? For example, if I took out a micro lot LEVERAGED to $1000 from $10, would I be paying the rollover on two days (Sat/Sun, possibly Monday) on the non-leveraged amount?
The calculation for $1000 seems too expensive ($42.5/day)… however the $10 seems more appropriate ($0.425/day).
So my question is:
Is this the correct way to do the calculation for a carry trade and are there other factors involved in making rollover calculations?
Thanks
CaveDog
The calculation isn’t on the margin you have, but the amount of the entire contract you are leveraging.
If you are trading one full sized position, the calculation is on $100,000.00.
On a micro, you are technically borrowing $990.00, so the interest is based on that amount.
Help any?
One other thing worth mentioning is, don’t be alarmed to see your entry point has been moved when trading resumes Sunday.
Some brokers book your profit, or loss as of this evening, and reopen your trade in the new position reflecting where your trade is in relation to current price when the market reopens. If there’s a sizable gap, it can be a little surprising.
It kinda shocked me the first time I left a trade open over the weekend on a
live account, as I wasn’t expecting it.
Your stop loss, and take profit will not be moved, just your entry.
Demos don’t allow for that action.
Cheers!
So if it is a 1k lot then I’m out $95 for the two days of interest or is that calculation incorrect? I’ve only been trading with $0.10 pips to start off with to get my feet wet, so a $95 rollover would kill me.
Due to the exchange rate, the Aussie is a tad expensive on the swap rate. But it won’t be $95.00 since you are trading a micro.
Clint, Rhodytrader, or KennyHubbard would be far better at explaining the calculations.
Those guys is smart!
My guess is more like $0.95 a day.
Two minis would be $9.50, and two full 100k lots would be the $95.00
On further thinking, your calculations may be off.
I think your are using annual interest rates, not daily.
It will most likely be less than $0.95 a day.
The smart guys can help:)