When you trade with RWMarkets, don’t stress over rollover and slippage. Include them in your trading strategy and you’re set. Remember, when you trade with us, you get ZERO slippage on currencies.
What Is Rollover?
“Rollover” is the interest rate traders are required to pay, or that they receive, on trades that have remained open from one day to the next. RWMarkets does not charge a rolling commission, but a rollover fee, known as an “overnight swap.” Rollover fees are calculated when a position is left open past 00:00 GMT.
Each currency pair traded on the market has a unique interest rate. At the end of the trading day, at 00:00 GMT, traders will either pay or receive the interest rate on the currency pair trades they left open.
How Does Rollover Work?
Interest rates are calculated daily in the trading market. At 00:00 GMT, the official end of each trading day, traders can view their account statement to check if they received or paid a rollover fee. During regular weekday trading, rollover rates are charged for the previous trading day. Because there are five days in a trading week, rollover rates for the following weekend are charged for three days, beginning on Wednesdays.
An Example of Rollover Interest:
If the interest rate of the base currency is lower than the interest rate of the secondary currency.
Example: EUR/AUD. EUR has an interest rate of 1.25%; AUD has an interest rate of 4.50%
The EUR is the base of this currency pair and its interest rate is lower than the AUD (Australian Dollar).
Buy/Long: If the EUR is bought, the trader will be charged the rollover fee.
Sell/Short: If the EUR is sold, the trader will be paid the rollover fee.
NOTE: The value of the rollover fee is affected by trade volume. The larger the trade volume, the larger the rollover fee.
How Are Rollover Fees Charged?
Sunday night – Monday: Standard Rollover Fee
Monday night – Tuesday: Standard Rollover Fee
Tuesday night – Wednesday: Standard Rollover Fee
Wednesday night – Thursday: Rollover Fee charged 3 times, (for Wednesday, Friday and Saturday)
Thursday night – Friday: Standard Rollover Fee
When trading currencies, “slippage” refers to the difference between what traders think the price of a trade will be and the price at which the trade was actually executed.
Slippage usually happens when the market is highly volatile. Highly volatile markets are usually a result of surprising circumstances like big news events, and move the market in unexpected directions. If slippage happens, it usually occurs between trading sessions for stocks and indices, or when the market is closed for currencies.
When you trade with RWMarkets, you’ll hardly ever experience slippage. Even then, you’ll only see it when you trade stocks. Slippage will never happen when you are trading currencies.
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