Swap / Rollover Policy

Having transparency as our main focus, Trademote handles rollover interest at competitive rates for all positions held open beyond 22:00 GMT. In the traditional Foreign Exchange, banks calculate interest on positions held over the weekend. Trademote does not charge any rollover on Saturdays and Sundays, when the markets are closed, however, as banks do charge interest for positions held over the weekend, a 3-day rollover fee is charged on Wednesdays, to leverage the time gap.

About Rollover:

Rollover refers to the transfer of a position to the following delivery date, which usually involves charging a fee. The fee arises from the difference in interest rates, charged by the banks, in case of currency trading. The forex gives a margin of two business days to allow spot trades to be settled.   Rollover is usually referred to the extension of the settlement date of an open position, to allow delivery of physical assets. However in margin trading, since there is no physical delivery, all open positions must be closed by the end of the day, and re-opened on the following trading day. This process is called rollover. Trademote does not close or re-open any positions automatically, but charges trading accounts for positions held overnight, through a swap contract, depending on the interest rates.

Swap Calculation Example:

Every currency trade is based on borrowing one currency in order to buy another. Interest is paid on the borrowed currency and earned on the purchased currency. For instance, if we assume that the interest rates in Europe and the US are 0.25% p.a. and 1.5% p.a. respectively, and you have a buy position of 1 lot in EURUSD at 1.1500, you will earn 0.25% per year on your EUR and pay 1.5% per year on your borrowed USD.   This means that with an open position you lose EUR 3.42 per day [100,000* (0.25%-1.5%)/365]. Similarly, if you have a short position in EURUSD, you gain EUR 3.42 per day. Thus, rollover interest can provide an added stream of profit or loss for you.

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