|
|
|
Forex basics: make money with money, part 1
FOREX or The Foreign Exchange market refers to an international exchange market where simultaneous buying of one currency and selling of another is done. Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen...
God's Diplomacy - International Trade and the Macedonian Economy
A British politician, Richard Cobden once (1857) wrote:
"Free Trade is God's diplomacy and there is no other certain way of uniting people in the bonds of peace"
International, free trade is particularly important to...
Stocks Or Foreign Exchange - Which One?
Many people would like to invest in stocks or Forex but are not
really sure of the difference between the two and don't know
which is the right choice for them. There is little doubt that
there are many options out there for you. But, it is hard...
Three Important Forex Concepts For New Traders.
As you enter the world of Forex you will find yourself learning
and using many new concepts that you may not have used or heard
before.
Three of this important concepts that you must understand are
what "Pips" are, What "Volume" is and what...
What Is Rollover Interest In The Forex Market?
In the spot forex market, all trades must be settled in two business days. A rollover refers to the process of closing open position for today's value date and the opening of the same position for the next day's value date at a price reflecting the...
|
|
| |
|
|
|
|
|
|
What Is Rollover Interest In The Forex Market?
In the spot forex market, all trades must be settled in two business days. A rollover refers to the process of closing open position for today's value date and the opening of the same position for the next day's value date at a price reflecting the difference in interest rates between the two currencies.
In accordance with international banking practices, Forex brokers automatically rolls over all open positions to the next date at 5 PM EST for settlement.
Rollover involves exchanging the position being held for a position expiring the following settlement date. For example, for trades executed on Monday, the value date is Wednesday.
However, if a position is opened on Monday and held overnight, the value date is now Thursday. The exception is a position opened and held overnight on Wednesday. The normal value date would be Saturday; because banks are closed on Saturday the value date is actually the following Monday. Due to the weekend, positions held overnight on Wednesday incur or earn an extra two days of interest.
Trades with a value date that falls on a holiday will also incur or earn additional interest. Forex Traders can earn interest on
rollovers, depending on the direction of their positions and interest rate differential between the two currencies involved.
For instance, the primary interest rates in Great Britain are much higher than in Japan, so if a trader buys GBP, he/she will earn interest at 5 PM EST time. on the other hand, if he/she sells GBP in this currency pair, he/she will pay interest at 5 PM EST time.
Overnight Interest/Rollover is automatically paid to a client's account after buying a currency with greater Interest Rate in its country, and charged to a client's account if the country issuing this currency has smaller Primary Interest Rates.
About the Author: Martin Maier is the Founder of Fenix Capital Management LLC http://www.fenixcapitalmanagement.com . He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Rating Companies such as STAR and MAR.
Source: www.isnare.com
|
|
|
|
|
|