I’m from UK and my broker is Pepperstone also based in the UK I believe and I deposited £gbp sterling pounds capital into my brokerage account.
I use MT4 phone app to mostly swing trade. On my open positions/closed trades I see the word ‘Swap’ with the - or no symbol before that word.
Does - in front of Swap means I’m liable to pay the overnight swap fees rate and if so when do I pay the swap, is it when I close exit my position trade or is it automatically deducted daily from my liquid balance at my broker when the position is still open no matter how long the position is open for?
Lastly which trading quote pairs that pepperstone offers, whether its indices, forex, commodities or whatever has the most lowest spreads and also they pay me the swap rate fee, not that I pay them the swap fees for swing trading?
What determines whether I pay the swap fee or they pay me the swap fee? And does this matter whether I go long or short?
Lastly when it comes to spreads, yesterday I opened a market order trade on the orange juice commodity market that had a spread of 174 and I can straight away see my position at a loss in the red of -174, then a minute later the spread dropped to 34 so my loss is reduced to -34 then I see spread went up to 174 range again and my loss increased. Question, is the spread trading fee fixed when I enter open the trade at whatever the spread was at the time or am I liable to variable spreads during how long I keep my position trade open? Does limit/stop orders have cheaper spreads than market orders?
Finally does increase lots sizes multiplies spread fees and swap fees?
Just thinking is it possible to blow up an account on swing trades just from spread and swap fees alone eating away at your liquid capital balance on a lets say for example plenty of lots open on a non-volatile market?
Swap fees are minimal, and depends on the currency movement overnight whether you get paid or vice versa, and it stays on your account until you close the trade.
Trading exotics, commodities etc. attract very wide spread variable movements throughout the days trading sessions, and IMO not worth trading, as there are much lower speads available all day on the most popular traded FX pairs.
The lowest spreads follow the three main session opening times, (Tokyo ,London, & NY) when their are multitudes of traders awaiting.
As for Pepperstone, it’s based in Australia, but yes they have a branch in UK. I found their FX currency spreads very competitive.
Oh Okay I thought Pepperstone was based in the UK. Do you happen to know as living in the UK am I protected by the FCA if my deposit capital into Pepperstone gets lost or anything happens to this broker?
Or which Brokers are UK based with suitable protections for me?
Brokers often carry licensing and regulation in multiple countries. You have to confirm with which entity you’re opening your account, as regulations differ between the different localities. IG Trading USA has a different set of regulations than say IG International Limited/IG Group.
Hi @very_452001 - I’m in the UK also but since the early 2000’s I have been trading via spreadbetting accounts. Amongst other things this means I don’t even know what “swap fees” means but I’d be very interested to learn if your broker is therefore more economical to trade through than one of mine.
Also, my preferred SB broker offers literally hundreds of markets but they don’t even list Orange Juice. I might be missing out on something - how did you come to select this commodity as your target?
Yes Orange Juice Commodity is on the Pepperstone as I am with this broker but the spread during mid-day for this is stupidly expensive. As soon as I opened the trade I was shocked to see I was negative -£174 straight away with orange juice because that’s just the spread fee not the loss for just 1 lot open.
Imagine the spread for Orange Juice in the winter months!!!
Thank you. As an example of spreads I am looking at, Gold is being offered to spreadbet at 1949.27-1950.26, a spread of 0.99, which represents 0.05% of price. This is tiny - I don’t know what percentage of the Orange Juice price 174 is but it doesn’t sound that small.
OJ (but not Simpson): i know only about the futures: they are traded on ICE, exactly as you might perhaps expect (“InterContinental Exchange”), but are surprisingly illiquid (go figure)
Everybody drinks orange juice right, surprised orange juice is illiquid when orange juice is suppose to be liquid at all times unless you put it in the freezer. get the joke haha
Hi @very_452001 , swap rates are added or deducted (-) from your cash balance overnight.
for FX it’s the difference in interest rates between the currency that you are long and the one that you are short. For exemple if you are long USD/JPY, US rates are currently higher than Japanese so you are due a rollover amount (minus broker admin charge). If you are short USD/JPY you will be debited a rollover amount (+ broker admin fee).
I don’t know about commodities, but I would imagine it depends on which exchange they are traded.
Oh, and swap fees are multiplied by 3 on wednesday nights! To know why, you need to research and understand how ‘Tom-next’ works.
yes
spreads are only fixed if that’s the type of account you have. Otherwise they vary, and get scary wide during the hours of low volume (the few hours after 10pm in UK). Limit/stop vs market order irrelevent.
unfortunately, you are not ready to trade on live account if you ask these questions. Regards Greg
