Jump to content

Counting the Cost: How Many Days Interest on Forex Open Positions- Sep 2023


AshishIG

850 views

Find below the table that shows the number of days' worth of overnight funding fees you will be charged if you keep a Forex position open on a particular day. The overnight funding fee is the cost of holding a position overnight through 10 PM UK time, and it is charged at the end of each trading day. This fee is calculated based on the size of your position and the interest rate differential between the two currencies involved in the trade plus the IG admin fee.

To help you manage your trading costs and make informed decisions, we have created this table that clearly displays the number of days' worth of overnight funding fee you will be charged. This information can be used to estimate the cost of holding a position over a certain period and to decide whether to keep it open or close it before the end of the trading day. In the future, we will regularly publish this table at the start of each new month.

image.png
image.png
image.png
image.png

Disclaimer:
Please note that in some cases, the number of days may change due to public holidays or bank holidays. We will do our best to inform you of any changes as soon as possible, but we recommend that you keep an eye on the holiday calendar to avoid any surprises.

3 Comments


Recommended Comments

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 

 

Link to comment
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

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...
us