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Rollover costs in Forex


Guest jp3

Question

Hi, I'm writing to learn what the cost would be for holding a forex trade overnight.

 

What would it cost to hold 1 £1 lot on USD/JPY overnight?

 

Thank you.

 

 

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Hi ,

 

We use the TomNext rate for our overnight fees on FX. This fee is made up of the underlying TomNext swap rate we obtain from our Bank feeds that price our FX markets, as well as a 0.8% IG admin fee.

 

If you hold a FX position open on your account at 10PM UK time you will be subject to this charge. Please note that as FX settles in the underlying market on a T+2 basis (2 days from the date of transaction), if you hold a FX position on a Wednesday at 10PM UK time you will be charged 3 days as it is deemed the weekend due to the underlying settlement.

 

The calculation for this is as follows: Bet size X TomNext rate =  Fee charged.

(Please note you will not always pay, as this is an interest differential there are times you will be receiving).

 

For USD/JPY, the TomNext rate is currently -1.17 / 0.48

 

This means that if you hold a short position you will pay 1.17 points and if long you'll receive 0.48.

 

Any more queries regarding FX funding please let us know!

 

Thanks,

 

MichaelC

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Guest Amran

Hi MichaelC,

 

Sorry for interrupting.

 

I have a question. I am holding an open SELL USDJPY position and I was charged daily rollover and 3 days rollover on Wednesday. No question on that because I am aware of the rates. My issue is I was charged today (01/05/2017) for 6 days rollover rates. Why is that so?

 

Greatly appreciate your kind thoughts on that. Thank you in advance.

 

Warmest regards.

-Amran Mohamed*

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The frustrating thing is that we never know in advance what the likely charge will be. We only find out once the charge has been applied. Is it that difficult to make your system a bit more transparent?

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Hi , thanks for the post.

 

If you are trading a JPY currency pair at the moment, you will be affected by the forthcoming public holidays in Japan.  Tomorrow (Wednesday 3 May) it is Constitution Day, Thursday is Greenery Day, and Friday is Children's Day.  As you are charged FX overnight interest on a T+2 basis, your 6 day charge (applied on Sunday night) covers Tuesday, and then the holidays and weekend: Wednesday, Thursday, Friday, Saturday, Sunday.

 

Japan has 15 public holidays each year so I would recommend double checking when these occur if you are interested in trading the JPY, so as not to be caught out!  A useful website to check is fxstreet which details all the public holidays as well as data releases.  You can access the economic calendar here.

 

Hope this helps - any more questions please ask!

 

Thanks,

Hannah

 

 

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Hi , thanks for the post.

 

If you are trading a JPY currency pair at the moment, you will be affected by the forthcoming public holidays in Japan.  Tomorrow (Wednesday 3 May) it is Constitution Day, Thursday is Greenery Day, and Friday is Children's Day.  As you are charged FX overnight interest on a T+2 basis, your 6 day charge (applied on Sunday night) covers Tuesday, and then the holidays and weekend: Wednesday, Thursday, Friday, Saturday, Sunday.

 

Japan has 15 public holidays each year so I would recommend double checking when these occur if you are interested in trading the JPY, so as not to be caught out!  A useful website to check is fxstreet which details all the public holidays as well as data releases.  You can access the economic calendar here.

 

Hope this helps - any more questions please ask!

 

Thanks,

Hannah

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Hi ,

 

I appreciate that the tom-next rates we use each evening are not published online for clients to see.  We receive these each evening, add our charge and then apply this to relevant client accounts.  I've actually raised this before with our FX desk to request the rates to be available for clients to see either on the platform or the website, and I understand it is a work in progress, as it is due to be published on the new web trading platform.  As this is still being rolled out and completed, the current ETA is within the next 6 months or so.

 

Appreciate your patience with this, and don't hesitate to check rates with the helpdesk if you would like more information.

 

Thanks,

Hannah

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Guest Wade80

Hannah, is there anyway to see the tom-next rates. I can't find them. EToro shows them before you enter a trade so I was surprised when IG didn't. Thanks

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Guest DaVinci

 I don't understand why does it matter if there are Japan public holidays. Is the USDJPY traded only in Japan? I understand the argument of weekend and Wed = 3x the amount, because on the weekend exchanges are closed and price is not moving (even though there is OTC trading but let's ignore that for our purposes). 

 

But what's the deal with public holidays in Japan? the pair still gets traded in banks and exchanges around the world.

 

Sorry but feels like an excuse and stealing people's money in this instance to charge 5-6 days for just 1 night overnight. Sorry because I am not used to this kind of practices from IG.

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hey  - At a very basic level the central bank of Japan 'owns' the JPY. When there is a public holiday the bank is shut, and therefore even though other banks are trading it and you can still use the yen, it won't actually 'settle' until the bank is open again. These overnight charges are based on the underlying market, and therefore the deliverable date of the currency. 

 

Therefore there is a bump in the tomnext rates to include an additional day. This is done globally the world over, not just an arbitrary IG charge. It's also worth noting that if you opened a trade after the 10pm cut off time, you could hold a trade for all those days without a charge, so if you're holding long term it has no real effect. 

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I just wanted to follow up on your comment that there is a plan to publish the tom-next rates in the new platform within 6 months or so.

 

Was this ever implemented? I have looked and can't find it. If not, do you know if it is still in the pipeline?

 

Thanks.

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Guest PandaFace

Don’t think it is.

Maybe worth having every so often but they generally don’t change that much unless there is a big interest rate change between national banks. Obviously unless you want to know down to the penny.

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As a follow up to from a 2017 query regarding posting the Tom-Next rates on the platform, is there any progress on that? It would add more transparency surely and I don't think it needs 3 years to integrate it into your system. 

Thank you in advance!

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4 minutes ago, PaulKg said:

As a follow up to from a 2017 query regarding posting the Tom-Next rates on the platform, is there any progress on that? It would add more transparency surely and I don't think it needs 3 years to integrate it into your system. 

Thank you in advance!

hi, yes they have been added to the platform for FX.

to find the bid/offer swaps rate see https://www.ig.com/uk/help-and-support/spread-betting-and-cfds/fees-and-charges/why-is-overnight-funding-charged-and-how-is-it-calculated-

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