In the spot forex market, all trades must be completed within two business days. A rollover is the process of closing open position for today's value date and the opening in the same position for the next value date at a price that reflects interest rate differentials between two currencies.

According to international banking practice, the Forex broker automatically cancel all open positions at a later date at 17:00 EDT for settlement.

Rollover involves changing the position held for the position following the completion date expires. For example, for surgery on Monday, the date is Wednesday.

However, if the position is opened on Monday and held overnight, the present value on Thursday. The only exception is the open position and held on Wednesday night. Normal exchange date will Saturday, because the bank is closed on Saturday the true value of the following Monday. Since the weekend, positions held during the night or the support to get two extra days of interest Wednesday.

Trade with a value date that falls on a holiday will also incur or earn additional interest. Merchants can earn interest on rollovers, depending on their position and direction of interest rate differential between two currencies involved.

For example, the main interest in the UK is much higher than in Japan, if a trader buys GBP, he / she will earn interest at 5 pm. On the other hand, if he / she sells GBP in this currency pair, he / she must pay interest at 5 pm ET.

Overnight interest / rollover automatically paid to the customer after buying a currency with higher interest rates in the nation, on behalf of a client if the country issuing the currency rate of major concern.
0 comments