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Hello, i have 2 questions about this:

1) in terms of the practicalites, does this mean that if i had a position in AUDCAD opened at 9am on 6 Sept and closed at 9pm that day, i would incur no interest rate costs, whereas: if i closed it at 11pm on the same day i would had a 3 day interest rate charge?

2) why do you charge interest in this lumpy way rather than spreading the weekly cost uniformly across the 5 trading days?

Thanks 

 

27 minutes ago, POC said:

Hello, i have 2 questions about this:

1) in terms of the practicalites, does this mean that if i had a position in AUDCAD opened at 9am on 6 Sept and closed at 9pm that day, i would incur no interest rate costs, whereas: if i closed it at 11pm on the same day i would had a 3 day interest rate charge?

2) why do you charge interest in this lumpy way rather than spreading the weekly cost uniformly across the 5 trading days?

Thanks 

 

Hi @POC,

Thank you for your questions.

1. Yes, 

Please note that forex settles on a T+2 basis, therefore, positions held through 10PM (UK time) on the 6th of Sept (a Wednesday) would will incur three days’ worth of funding to cover the settlement of trades over the weekend. A position that is held through Wednesday 10PM (UK time) it's effectively being held through the weekend as positions can't be settled until after Friday 10PM (UK time).

2. This is because of interest rate differentials between the two currencies in a pair, which are constantly changing.

All the best,

KoketsoIG

That's clear. Thanks