Rollover and Spreads

What is Rollover and when does it apply?

Rollover is simply the interest paid or earned on a position that is held overnight. Specifically, each currency has an interest rate that it is associated with and with currencies being traded in pairs, every trade involves not only 2 different currencies but their respective interest rates as well. If the interest rate on the currency that is bought is higher compared to the interest rate of the currency that is sold, the trader will earn rollover interest (this is usually referred to as positive roll).

Conversely, if the interest rate on the currency that is bought is lower than the interest rate on the currency that is sold, then the trader will always pay the rollover (usually referred to as negative roll). In this respect, rollover can either add a significant cost to the position or enhance its profitability.

The Trader FX4 MultiTerminal will automatically calculate and apply all rollover interest at 5PM EST in New York, usually considered the beginning/end of the Forex trading day. Any positions that are kept open at 5PM are considered to be «held overnight» and are subject to the applied rollover. A credit or debit for each position held over the New York cutoff will appear within 60–90 minutes and is applied directly to your position (also available in the account balance).

With most banks around the world being closed on both Saturday and Sunday, there is no subsequent rollover to apply to any positions over the weekend. However, most banks still apply interest to funds held on those two days. As a result, to account for the days, the currency market will book 3 days of rollover on Wednesdays which will make the daily rollover three times the individual daily amount.

Comparatively, there is no rollover applied on holidays. However, holiday rollover will usually be applied 2 business days before the actual holiday. For example, should a holiday fall on the 3rd day of a single month, the rollover interest will be added on the 1st day in order to account for the holiday.

How are your spreads?

Working through our liquidity providers, Trendoks Trader FX4 MultiTerminal can offer clients the tightest and most competitive spreads in the industry during normal market conditions. In addition, the offered spreads remain fixed and guarantee that clients are given industry standard rates.