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Overnight rolls


Guest Paddyobiwan

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Guest Paddyobiwan

Hi does anyone know the charges for overnight shorts in Dow Jones - I had 20 short position and was charged 200 quid - seemed steep ? Also, if I square at 1 minute to close and re instate 1 min after close of Dow , I’m guessing I don’t get charged roll ?

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image.png.6526812eaa931f1aac10d4a45243b15a.png

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so Dow is using the USD rate and USD uses 360 instead of 365 in the calc so the IG rate (commission and libor) is 5.02% for a long trade and -0.02% for a short.

so to give the the full calc for the cost of the long trade in the example above is; (£6.69 overnight charge for a £2/point bet.)  see calc below

 

image.png.42c0c6fc4bf5cbf48c1869879e4d66e5.png

 

And for the £2/point short in the example; -£0.03 overnight charge (credit) see calc below;

image.png.3215582f2bff25b374e824abb550b266.png

So for your own calc you will need to use your £/point and update the closing price, the commission is set and the libor rate is currently fairly stable.

  

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@andysinclair, unfortunately the snippets of information are somewhat scattered so it is difficult to bring it all together and the IG Wall street example in the post above was in a recent update to changes for the Libor used.

USD denominated markets now use the USD 1 month Libor rate rather than GBP 1 month Libor and also calculate the year as 360 rather than the 365 used in GBP denominated markets. 

Easy to see why it all gets confusing.

 

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