Rollovers on the Forex Market

Forex Rollovers

Rollover is interest debited (paid) or credited (earned) to your account when you hold positions overnight. It is the difference between the prevailing interest rates of the traded currencies. You earn rollover if the interest rate on the currency you bought is higher relative to the interest rate of the one you sold. In the same manner, you pay rollover if the interest rate on the currency you bought is lower relative to the interest rate of the one you sold. Understanding rollovers can help you profit more from trade and minimize trade losses.

With FX Pro BITcoin, rollovers are automatically calculated for your convenience.

Example

Suppose you purchase a EUR/USD pair, that is, you buy euros by selling US dollars. What is the amount of interest paid or earned for holding EUR/USD overnight? If the interest rate for the euro is 3.5% and the interest for the US dollar is 2.5%, you will earn a rollover of 1% a year. On the other hand, if you sell the EUR/USD pair, you will pay an interest of 1% year.

It is important to note that the rollover interest is debited or credited based not on the margin put up for trade but on the total value of the trade.

Booking

A trade opened before 5 p.m. (EST) and held until after this time is considered as trade held overnight, and is therefore subject to rollover. A credit or debit is posted on your account before 6 p.m.