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Do you only get charged a negative swap fee??

Discussion in 'General Forex Talk' started by COB, Jun 10, 2009.

  1. COB

    COB Recruit

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    I would like to hear from anyone who can tell me how the swap works.

    I was under the impression that when you are in a trade longer than one day you will get a swap, negative for a sell and positive for a buy.

    But I seem to be getting only charged for a sell and nothing for a buy.

    I would love to hear from anyone with some insight on my situation.

    Thanks,cob.
     
  2. Pharaoh

    Pharaoh Colonel

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    Swap fees are charged because of the difference in the interest rates of the two currencies you are trading. You are effectively borrowing one currency to buy another, so if you borrow a low-rate currency to buy a high rate currency, you should have positive swap. If you borrow a high rate currency to buy a low rate currency, you'll pay negative swap. (I think I got that right.)

    Of course, you'll notice that the negative swap is always larger than positive swap. I'm sure there are some legitimate costs involved, but most brokers pad this to make more money.

    Check with your broker (or any broker you are considering) and look at their swap rates table. You'll probably find that some pairs have negative swap both ways.
     
  3. COB

    COB Recruit

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    Ok, that makes it alot clearer thanks for the reply.
     
  4. Rentech

    Rentech Private

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    I see this is a very old topic, but I've been trying to figure this out too for the last couple weeks. What I seem to have found is that every broker has different swap rates! Seems they just make up whatever they want and figure no one will question them. I noticed my swaps with my broker are always negative. Very frustrating. For example whether i buy or sell the eur/usd or gbp/usd I'm always charged a negative overnight swap rate.

    If anyone here has any experience or knowledge of how the brokers "work" to calculate this I would be very much appreciative.

    Thanks
     
  5. RahmanSL

    RahmanSL Major

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    In your MT4 platform, right click on the "Market watch" section...select "Symbols". Then click on any currencies pairs or commodities to see what swap rates are given by your broker...e.g if you click on "AUDCAD" it should show (on my broker's MT4 platform):
    Swap long - 3.804
    Swap short - -4.975

    This means you will get positive swap of 3.804 for long positions, but charged 4.975 for short position. These figures (3.0804 and -4.975) represent either currencies or points by your broker (don't ask me what they represent coz I too am not sure with some broker. Best thing is to ask your broker).
     
    #5 RahmanSL, Aug 3, 2012
    Last edited: Aug 3, 2012
  6. Rentech

    Rentech Private

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    Thank you RahmanSL

    Here are mine for a few pairs if you don't mind comparing with me and giving your opinion

    AUDCAD
    Swap long - 1.05
    Swap short - (-18.95)

    EURUSD
    Swap long - (-9.38)
    Swap short - (-10.68)

    Does this seem ridiculous?

    Thanks
     
  7. RahmanSL

    RahmanSL Major

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    As I said, swaps differs among brokers.

    For your example, my broker have the swap rates in red:

    AUDCAD
    Swap long - 1.05 - 3.804
    Swap short - (-18.95) - (-4.975)

    EURUSD
    Swap long - (-9.38) - 1.014
    Swap short - (-10.68) - (-2.369)

    You should write your broker for clarifications; yah!
     
  8. f-man

    f-man 4Xangels Representative

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    FYI there are also brokers that offer swap free accounts.
     
  9. Rentech

    Rentech Private

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    Thanks for feedback everyone.

    I do think my broker is taking the piss though, when i compare to other brokers here-
    http://www.forexbrokerz.com/forex-swap

    Another question:

    How do i calculate what these numbers mean?
    For example i'll take AUDCAD
    Swap long 3.804
    one standard lot

    what would the swap be?

    Thanks again for your help!
     
  10. RahmanSL

    RahmanSL Major

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    To answer your question is fairly complicated and I am not good at that....I usually assign one of my engineers to do that as I am only interested in the results :p

    The broker EXNESS has a nice little tool at their log-in page which I have attached below for your example and to figure out the calculations.

    Go to EXNESS log-in page, click on "Trader's calculator" (left hand side)....select the currencies pair you want to calculate on the "Forex" section (you may change the Leverage and other information as you like)...then simply click "Calculate" and....voila... everything is revealed ;)
     

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