Swap Rates? Vary by Broker?

[Hypochondriac]

I've looked at a handful of brokers. 2 of them claim the swap rate I receive is determined by the interbanks, but both of those brokers quoted me a different rate for the same currency pair. A third had the swap rate limited to a maximum of .5 pip. The broker who had the .5 pip limit also had the highest swap rate in my favor. If the broker claim the swap rate is determined by the banks how can two different brokers had different rates?


Any idea which broker gives the best swap/rollover rates?

 

[synaesthetique]

If the broker claim the swap rate is determined by the banks how can two different brokers had different rates?


Any idea which broker gives the best swap/rollover rates?

Because in reality almost every broker is actually acting as an IB to one of the major market makers (citi, deutsche, hotspot etc.) which do not offer MT4. So the rates will vary depending on their introducing broker agreement. Swap rates are one of those annoying realities of trading and really there's not much of a way around it aside from dealing with them, so I wouldn't base a brokerage decision entirely on them. With that said there are steps to avoid exposure - if possible close your trades before the markets roll over at the close of each session. I'm assuming you're using MT4 since that's what most people use - if you look at your chart preferences you can tell it to "Add Period Separators" which on the H1 and H4 time frames will show you when market rollovers are coming up. Aside from that, if your trading method is severely affected by swap rates then you might want to re-evaluate your plans as your profit margins are too small. Remember that swaps are affected by position size so you should be getting tiny swaps with micro positions and larger swaps with standard-lot positions.

 

[Pharaoh]

Exactly correct - each broker sets their own. They won't charge less for negative than they get charged (and usually charge a LOT more) and they won't pay more for positive than they get paid (and usually pay less - sometimes even going negative on a positive pair). It's just another way to pad their profits - at YOUR expense.

Be careful with "swap free" accounts. Many of them charge a "maintenance fee" which is as much or more than any swap you would pay.

 

[Hypochondriac]

Thanks for the information. I think it's rather unfair that some brokers make money off the spread and the swap. Ah well best to vote with my feet and not use them.