What the swap was on March 14?

[neueneuen]

Hi @KoketsoIG,

Thanks for investigating margin requirements in another thread.

Could you kindly check with the relevant team what overnight credit (column swap bid in platform watchlists) was applied for short USD/TRY positions at the end of the trading day on Thu, March 14?

WBR

Edited March 28 by neueneuen

[AhmedMarsh]

Thank you for your request. I would be happy to help with this issue regarding overnight credit. It is necessary to check with the relevant team about the applied swap rate for short USD/TRY positions on the specified day. I'm waiting for a response from VBR.

[KoketsoIG]

17 hours ago, AhmedMarsh said:

Thank you for your request. I would be happy to help with this issue regarding overnight credit. It is necessary to check with the relevant team about the applied swap rate for short USD/TRY positions on the specified day. I'm waiting for a response from VBR.

Dear @neueneuen and @AhmedMarsh,

Thank you for the post.

Apologies for the delay we were off for Good Friday/Easter weekend, and we hope you had a good Easter.

Please find the bid and offer rates for the USD/TRY on March 14th: bid 327.05, offer   -407.64.

Thanks,

KoketsoIG

[neueneuen]

2 hours ago, KoketsoIG said:

Please find the bid and offer rates for the USD/TRY on March 14th: bid 327.05, offer   -407.64.

Hey @KoketsoIG,

Thanks for the information.

March 14th was Thursday, where USD/TRY has triple overnight (as USD/TRY is T+1 instead of T+2 so Thursday is overnight over the weekend). Should this bid be tripled or it's already tripled? Or was March 14 a holiday in the US or Turkey and triple overnight was a day before?

[KoketsoIG]

Dear @neueneuen, 

Please note that the 'FX Interest Charge' of 3 days is for when you hold a position past 10 PM Wednesday. You can also use the 'counting the cost' monthly blog that we post as a guide of how many days funding you will be charged on a specific day: 

 

The swap/bid offer rates don't have the three days of funding incorporated, you will have to multiply the swap rate by 3 to get three days' worth of funding.

Thanks,

KoketsoIG

 

[neueneuen]

Hey @KoketsoIG,

Thank you for the reply and thank you for this list - I was not aware IG posts these tables.

According to the blog post, March 14 for USD/TRY should be tripled (last image in the blog post). So the swap bid should have been 3*327.05=981.15. I'm quite sure the bid that was applied was 3*163.69=491.07 (or around that number) which is roughly 2 times less.

Could you kindly investigate with the team, please?

Edited April 2 by neueneuen

[KoketsoIG]

1 hour ago, neueneuen said:

Hey @KoketsoIG,

Thank you for the reply and thank you for this list - I was not aware IG posts these tables.

According to the blog post, March 14 for USD/TRY should be tripled (last image in the blog post). So the swap bid should have been 3*327.05=981.15. I'm quite sure the bid that was applied was 3*163.69=491.07 (or around that number) which is roughly 2 times less.

Could you kindly investigate with the team, please?

@neueneuen,

You multiply the bet size by the swap rate and then multiply the result by 3 to get the three days fund.

All the best,

KoketsoIG

[neueneuen]

4 minutes ago, KoketsoIG said:

@neueneuen,

You multiply the bet size by the swap rate and then multiply the result by 3 to get the three days fund.

All the best,

KoketsoIG

Yes, I know. Bearing this in mind, the applied swap bid was around bet_size*3*163.69 instead of bet_size*3*327.05, roughly two times less than it should have been.

Edited April 2 by neueneuen

[KoketsoIG]

17 hours ago, neueneuen said:

Yes, I know. Bearing this in mind, the applied swap bid was around bet_size*3*163.69 instead of bet_size*3*327.05, roughly two times less than it should have been.

@neueneuen,

The rates are indicative and can be used as a guide of how much will be charged.

Thanks,

KoketsoIG

[neueneuen]

@KoketsoIG, I appreciate this, hence why I asked which swap was applied in the past which should not be indicative.

The problem with the applied 3*163.69 is that it is roughly 18.554% annualised while the Turkish central bank rate was 45% at that time IIRC. I appreciate FOREX swap differs day to day and does not always correlate with the central bank rate, but 18.554% was out of the ordinary by a magnitude of 2-2.5 even compared to the swap usually applied by IG and especially compared to the indicative swap of 46.5% annualised posted by IG in the blog (I appreciate blog post is about shares and indices and not FOREX - that is besides the point)

 

I think this exceptional day was worth checking out - what happened to make swap 2.5 times less than usual?

Edited April 3 by neueneuen

[neueneuen]

Worth noting that the number you posted - 327.05 - would be 37.071% annualised which is in line with the regular situation.

Edited April 3 by neueneuen

[KoketsoIG]

Thats the swap bid rate for March 14th as you requested @neueneuen

[neueneuen]

15 minutes ago, KoketsoIG said:

Thats the rate for the bid for March 14th as you requested @neueneuen

327.05 or 163.69? I'm not sure we're on the same page.

I asked what bid was applied. You said 327.05 which is in line with the expected bid to be applied. But in reality, 163.69 was applied.

I'm trying to understand

1. whether IG is aware that 163.69 was applied

2. why did that (swap that is 2-2.5 times less than usual and than the benchmark) happen

Edited April 3 by neueneuen

[KoketsoIG]

6 minutes ago, neueneuen said:

327.05 or 163.69? I'm not sure we're on the same page.

I asked what bid was applied. You said 327.05 which is in line with the expected bid to be applied. But in reality, 163.69 was applied.

I'm trying to understand

1. whether IG is aware that 163.69 was applied

2. why did that (swap that is 2-2.5 times less than usual and than the benchmark) happen

@neueneuen,

I will double-check with the desk and get back to you.

[neueneuen]

Hi @KoketsoIG,

I hope you are well.

Were you able to get any further information from the desk?

WBR

[KoketsoIG]

Hi @neueneuen

Thanks for coming back to this,

Please note that number 1 above has been confirmed, unfortunately, I don't have number 2 yet. We will keep you updated.

Thanks,

KoketsoIG

[neueneuen]

Hey @KoketsoIG,

I hope you are well.

Any news on this?

WBR

[neueneuen]

Hey @KoketsoIG,

I hope you are well.

Same problem today. GBP/TRY (and as far as I can see, other TRY pairs had similar situation today) swap was applied off swap bid=157.92 which is ~14.2% annualized when IG estimates funding rates in TRY as 52.99% (see below) and Turkish CB rate is 50%. That's ~3-3.5 times less than expected.

Could you kindly investigate, please?

WBR

[KoketsoIG]

Dear @neueneuen,

Thank you for the post.

Please note that we will provide more information on this as soon as we have feedback from the relevant team.

Thank,

KoketsoIG

[neueneuen]

Hey @KoketsoIG,

I hope you are well.

Same problem most of the last week and this week, TRY is being overnighted at around 20-25% when IG estimated rate is 52.99% and Turkish CB rate is 50%.

But the worst was overnight today, May 9. EUR/TRY swap bid was showing in the morning at 200+ which is very low as it is. Just before applying the swap it changed to showing even lower 189.06 which is ~19.8% annualized which is outrageously low.

19.8% vs 52.99%/50% - this is 2.68 times lower.

What is going on?

 

It's been more than a month since you've asked the desk. This is an ongoing issue that keeps affecting customers. Why is there no answer yet?

Edited May 9 by neueneuen

[KoketsoIG]

44 minutes ago, neueneuen said:

Hey @KoketsoIG,

I hope you are well.

Same problem most of the last week and this week, TRY is being overnighted at around 20-25% when IG estimated rate is 52.99% and Turkish CB rate is 50%.

But the worst was overnight today, May 9. EUR/TRY swap bid was showing in the morning at 200+ which is very low as it is. Just before applying the swap it changed to showing even lower 189.06 which is ~19.8% annualized which is outrageously low.

19.8% vs 52.99%/50% - this is 2.68 times lower.

What is going on?

 

It's been more than a month since you've asked the desk. This is an ongoing issue that keeps affecting customers. Why is there no answer yet?

Dear @neueneuen,

Please note that we have taken note of your post for the relevant team.

Thanks,

KoketsoIG