Rollover of a position for the next working day happens by moving the value date of the respective position to a new value date – that is the next working day. The standard value date for the main currency pairs is T+2 working days. Currency spot positions held by 17:00 New York time, are rolled to a new value date. As a part of the roll, positions are being charged with a rollover interest, because of the retention of the same for the next day.
When calculating the FX swap, Benchmark takes into account the Tom/Next (Tomorrow/Next) interest rates from the interbank forward market of top liquidity Tier-1 banks. The resulting value is taken directly from the liquidity providers, partners of BenchMark Finance. Rollover can be positive or negative. The main components forming the Tom/Next interest are based on the interest rates differential between the currencies (part of the pair), liquidity (in this case the liquidity of the forward market can be reduced by upcoming important political events, end of a month, a quarter or a year), demand for the interbank forward market, uncertainty around currencies and other important events concerning some of the currencies.
We are long in EURUSD up to 17:00 New York time. The value date of the currency position will move with a single working day forward. When long in EURUSD, you have bought EUR and simultaneously sold the adequate amount in USD. If EUR has a bigger interest rate than the USD, you will receive an interest, which will be recorded in your account. If the EUR has a lower interest rate than the USD – you will owe an interest, which will be charged from your account. Deals concluded before 17:00 New York time, are not rolled.
Important: As the new value date of the position is always the next working day, and the markets do not work on weekends, the rollover for the opened positions, held in Wednesday to Thursday is triple. Moreover, during a certain country’s national holidays, the value date for the respective currency (therefore for the entire pair) moves to the next working day after the holiday.
When entering a deal with EURUSD on Wednesday, its value dates is Friday (T+2). If this position is closed on Thursday (i.e. the position stays open to 17:00 New York time in Wednesday to Thursday), the value date will move from Friday to Monday and you will be charged with a rollover for three days – Saturday, Sunday and Monday.
Example: You are short in EURUSD with 0.10 lots (10 000 currency units). The daily rollover in the platform is a positive number in the amount of 2.70 USD for 1 lot. The rollover, which you will receive is 1/10 from 2.70 USD, ergo 0.27 USD.
The applied daily swap rates for both long and short position in currencies can be checked on this link.
Note: Swap rates, which will be applied for the next day, are updated in the calculator after 16:00 GMT.
The rates are calculated at the beginning of the next business day (17:00 New York time). When opening and closing a position within the same business day, the position will not be swaped.