Optimal trading conditions, no matter what type of trader you are
Control your Swap Rates with Switch Markets.
Switch Markets offers some of the tightest spreads on the market. Often we see our EUR/USD spread at as low as 0.0 pips!
So, what are Swap Rates?
You'd be surprised how many traders don't know about Swap Rates and how to control them. In a nutshell, the 'Swap' means that if you keep your trading positions open overnight, you could have some fees to pay your broker.
How is the forex swap rate calculated?
As you know, Forex trading is the buying or selling of a country's currency, against the currency of another country. Brokers enable you to execute the trade and then 'swap' the currency back again, at another time. The forex swap rate is calculated on the difference between the interest rate between the two currencies you are trading.
When you don't 'swap' the currency back with a broker at the end of the trading day (5 pm GMT time), there is a fee or credit involved and the brokers allow you to hold your open position overnight.
For traders, this can either be a fee or a credit back to you, this all depends on the currency pair you are trading and the interest rate performance.
What you need to know:
- Swap Rates are applied every trading day at midnight, on any open positions.
- Swap Rates are especially important to traders that hold their positions overnight.
- Swap Rates mean you could end up with a fee for holding your trade, or, a credit (depending on the interest difference).
- On a Wednesday, the rates tend to be triple the amount compared with other trading days (to accommodate for the weekend).
- Each currency pair has its own rollover fee.
- Most traders do not know about the Swap Rates when trading with any broker.
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