Rollover: what is it and what is it use for?

  • Swap rates are most profitable
  • Swap amount is max.transparent
  • Applying three-day method for rollover calculating
  • Full compliance with the current percentage

How to transfer position?

For all positions that are not closed after 10:00 pm (GMT), the funds are added or withdrawn for the client accounts, using the most competitive rollover interest. As it is known, there is no rollover on Saturday and Sunday, the markets are not working during this time. However, for any position, which was not closed during Saturday and Sunday, banks are charging interest. In order to reduce this time gap, on Wednesdays TwiceFX uses a three-day rollover calculating method.

Rollover: what you should know

Rollover is called the extension of the period during which it is possible to make calculations on a completed transaction (the calculation terms for open position). In foreign currency market, 2 working days are allotted for each money transfer transaction.

The peculiarity of margin trading is that the product as a physical item in fact is not transferred. For this reason, it is necessary that all positions that are opened at 22:00 will be closed. They will be opened again for the next trading day. So it means that calculations will be postponed for another operational day. This method is called “Rollover”.

The rollover agreement is done using swap. In this case, the trader will either make profit or lose money. TwiceFX will add money/withdraw money on trading account to keep the open position until the end of the next day. Existing positions are not closed in order to be opened later. It depends on the current interest rates.

How to calculate rollover?

Basically, each transaction, within which you buy/sell currency, is based in borrowing currency of one type in order to buy a currency of another type. So, when borrowing currency, the interest is paid by trader, but if he buys currency, he gets interest for it. To make things easier, let’s turn to simple example. In the USA and Japan, the percentage is 2.5 and 0.25 per year, respectively. One position is opened to purchase 1 lot of USD / JPY, and the size of the bet is 118.50. So, trader can get 2.5% per an. from his dollars, for borrowed yen he has to pay 0.25% per an. Thus, with an open position, the daily income will be $ 6.16 (100,000x (2.5% -0.25%) / 365). This amount will be credited to the trader’s account and its equivalent per day will be 0.73 points (118.50 x (2.5% -0.25%) / 365). Similarly, if the position of USD / JPY is open, the loss of trader per day will be 6.16. From this example we can conclude that by rollover it is possible to receive both profit (in %) and loss.

How to reserve rollover?

Exactly at 10:00 pm (GMT) is the time, when the current currency market trading day finishes and the next trading day begins. Each position remaining open at this time of the current day will be moved to the next day with a rollover applied to it. This also applies to positions that will be opened at 9:59 pm (GMT). If the position was opened at 10:01 pm (GMT), the rollover will not be applied to it until the next day. Funds for each position that will be opened at 22:00 are credited and withdrawn within account during hour, and are transferred directly to the personal financial account.

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