Trading Concepts

Rollover Rates

The most common costs associated with trading currencies are the spread and rollover rates.

Rollovers are only applied to positions that are open at market close in New York – 5pm ET. You can either earn or pay when a rollover is applied to your position.

When trading a currency you are borrowing one currency to purchase another. The rollover rate is typically the interest charged or earned for holding positions overnight. A rollover interest fee is calculated based on the difference between the two interest rates of the traded currencies.

If the currency you are buying has a higher interest rate than that which you are selling, you will typically earn rollover fees. If the currency you are selling has a higher interest rate than that which you are buying, you will typically pay rollover fees.

Example:

You’re trading EUR/NZD (Euro/New Zealand Dollar). The EUR has a low interest rate whereas the NZD has a relatively high interest rate. You are borrowing the high-rate currency to buy the low-rate one, so you are trading at a premium: you will pay rollover fees on this trade if held overnight. If you sell EUR (i.e. go short) to buy NZD, you will be trading at a discount and earn rollover rates on this trade.

You can find rollover rates in the Market Information Sheets on any of our trading platforms. Displayed charges use prevailing prices. These may vary at the time financing is applied. In the example above, you would pay $1.11 on a long 10,000 position and earn $0.58 on a short 10,000 position for a typical one day roll. Rollovers are tripled on Wednesdays to account for the weekend. There are no rollovers on Fridays. Holidays and quarter end can also result in a multi-day or zero rollover.