Trading Cost
Along with spreads, commissions, and margins, there are some other trading costs to be considered. These depend on how long you hold on positions, which products you trade, and your approach to trading activities.
Swaps in Trading
When you trade in the Forex or CFD market, every position that remains open overnight is subject to a small interest adjustment known as a swap (or rollover). This cost or gain is automatically applied to your account each day your trade stays open beyond the market's daily cutoff time.
Swaps are an essential part of leveraged trading, reflecting the interest rate difference between the two currencies in a pair — or, in the case of commodities or indices, the financing cost of holding that position overnight.
What is Swaps
A swap is the interest earned or paid for holding a trading position overnight. It is expressed in points or percentages and represents the cost of carrying the position beyond the end of the trading day.
- ●If you buy (go long) a currency with a higher interest rate and sell one with a lower rate, you may earn a positive swap.
- ●Conversely, if you buy a currency with a lower rate and sell one with a higher rate, you'll pay a negative swap.
- ●This applies not only to currency pairs, but also to commodities, metals, indices, and CFDs, where swap rates reflect overnight financing or storage costs.
How Do Swaps Work?
Every currency pair has an embedded interest rate for each side — the base and quote currency. When a position is rolled over, brokers calculate the interest rate differential between these two currencies and apply it to your open trade.
Swaps are calculated automatically at midnight server time (trading platform time). Depending on whether you are long or short on an instrument, the swap may be credited or debited from your trading account.
How Are Swaps Calculated?
Swap values are typically quoted in points (pips) or percentage per annum. The calculation depends on your position size, direction (buy/sell), and the instrument's current swap rate.
General formula:
Swap = (Lot Size × Contract Size × Market Price × Swap Rate) / 360
(Some markets use 365 days for the annual divisor.)
EXAMPLE
Let's assume you open a 1-lot long position on EUR/USD at 1.0850. If the swap rate for a long position is -2.13% per annum, the daily swap would be:
(1 × 100,000 × 1.0850 × 2.13%) / 360 ≈ $6.42
This amount would be deducted from your account each night the position remains open. If the rate were positive, the same calculation would credit that amount to your account instead.
Why Are Swaps Charged?
Swaps reflect the interest rate differential between currencies or the financing cost of holding leveraged positions. When you trade with leverage, your broker effectively lends you capital to open a larger position than your account balance alone would allow. The swap charge compensates for that overnight financing cost.
Key reasons swaps are charged:
- 1To adjust for interest rate differences between currencies
- 2To cover the cost of overnight financing on leveraged trades
- 3To maintain liquidity and balance in the interbank market
Why Swaps Are Important and Cannot Be Waived
Swaps are not arbitrary fees — they are a necessary component of real-market trading. They reflect the genuine cost of maintaining open positions and the funding mechanism that connects retail trading to the global interbank market.
Waiving or removing swaps would disrupt this balance and misrepresent market conditions. For compliance and transparency, all swap rates are applied uniformly and cannot be manually removed or adjusted except in specific swap-free (Islamic) account types.
How to Check Current Swap Rates
Current swap values for all available instruments can be checked directly from your trading platform and under the Documents section of the trading portal. Each instrument's swap rate is updated daily and displayed clearly for both long and short positions, so you always know the potential cost or gain before holding trades overnight.
Trade Holding Fee
A trade holding fee, often referred to as a holding cost or financing fee, is a charge essentially is the cost of keeping a leveraged position active for certain time and can be incurred when you hold a trading position open overnight. The costs are influenced by various factors, including swaps rates set by broker pays for swap free accounts, the duration of the trade, and the size of the position.
Trade Holding Fee
Swap-free Islamic accounts are designed to meet the needs of traders who prefer not to pay or receive overnight swap charges. However, to maintain fair market conditions and cover server and liquidity costs, a Trade Holding Fee applies when positions are held open for an extended period.
This Trade Holding Fee is a fixed cost applied only to swap-free accounts when a position remains open for more than or equal to 15 consecutive days. It is charged on each account type and can not be charged on swap accounts, where rollovers are already applied.
The fee is applied to cover the technical and liquidity-related expenses of maintaining long-term open positions on our trading servers, while ensuring that all account types remain fair and sustainable.
Trading Hours
It's essential for traders to be aware of the trading hours relevant to the assets they are trading. Trading outside of regular hours can be subject to different liquidity conditions and spreads, which can affect the execution of orders and trading costs. Additionally, understanding trading hours is crucial for managing risk and executing trading strategies effectively.
See at a glance all the trading hours for our broad range of products.
Inactivity Fee
There is a monthly charge of (the amount depends on your account size) on dormant accounts, but no deduction is made if there are no funds in the account. An account is considered dormant if there has been no trading activity for a continuous period of 6 months.
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