How much is the cost/charge of swap points (overnight financing)? Table of Contents

What is overnight financing (swap points)?

Financing is charged against your positions held overnight (past 17:00 EST).

With Forex financing, if the first-named currency has a higher interest rate, then you are credited the financing for having a long position and debited for having a short position*.

Should the first-named currency have a lower interest rate, then you will be debited financing for holding a long position and credited for having a short position*.

*Since the relevant inter-bank rates for some currencies are currently very low, the overnight financing may be negative regardless of your position.

How to calculate Swap Points of Forex

Financing is calculated as follows:

Financing = Q x (I +/- M) / Y x D

Where:

Q Quantity of 1st currency
I Differential in interest rates between 1st and 2nd named currencies
M Premium charged by Valutrades
Y 360 – with adjustments made for AUD and GBP markets with 365 days
D Numbers of days to charge interest

How to calculate Swap Points of Gold and Silver

For Gold and Silver positions held overnight (past 17:00 EST), a financing charge is applied.

The charge will be converted to your base currency.

Financing = Q x P x (I +/- M) / Y x D

Q Quantity of Ounces
P Price at time of calculation
I Relevant interest rate
M Premium charged by Valutrades
Y Number of days used in calculation; typically 360 (but 365 for GBP and AUD instruments)
D Number of days to charge interest