Calculation method for foreign exchange trading inventory fee (overnight interest)

foreign exchangeTransactions come with overnight interest. The specific interest is calculated based on the currency you purchased.

The delivery date in the spot foreign exchange market is two days. Positions opened on Monday should have a delivery date of Wednesday. If the position opened on Monday is held overnight until Tuesday, the next delivery date will be Thursday. The delivery date for positions opened on Wednesday and postponed has been postponed from Friday to Saturday, but the actual delivery date is next Monday as the bank is closed for two days on weekends. If the trading position is settled on the same day, then this transaction will not be delayed.


When a transaction is pushed to the next delivery date, there is a delay. Any extension of a foreign exchange position will generate a hedging or covering spread, which is determined by the overnight interbank lending rate. If investors have currency with relatively high interest rates, they can obtain the price difference on the currency interest rate when the foreign exchange position is extended. The amount of price difference varies depending on the daily price fluctuations and the trading volume of the foreign exchange position.


aboutUSDCombination of benchmark currencies:
for exampleUSD/JPYAssuming100K(Standard hand,1Standard hand account, short selling on Wednesday1handUSD/JPYThe market price is107.44/107.47Overnight until Thursday,PrmSell%-2.18Customers who sell US dollars will pay interest, calculated as follows:
-2.18%/360x100000x1handx 3day= $18.17) (Special note: On Thursdays, the overnight interest rate plus or minus will be three times higher than usual, as delivery actually occurs during the week.)1Over the weekend2Days


For cross currency combinations:
for exampleEUR/GBPAssuming1K（0.01Hand account, buy on Friday5handEUR/GBPThe market price is0.6885/0.6890Overnight until next Monday,PrmBuy%-3.71Customers who purchase euros will pay interest, calculated as follows:
-3.71%/360x1000x5handx0.6890×1day= (£0.355)=($0.63)


If the customer is doing long(hold)High interest currencies and overnight interest on open positions will be added to the account's capital. On the contrary, the relevant overnight interest will be deducted from the funds.


According to international banking practices,Foreign exchange transactionsstay2Settlement after trading days. Overnight interest is calculated based on the settlement date.


Monday:1Overnight interest. Trading on Monday, settlement on Wednesday, holding position from Monday to Tuesday, settlement from Wednesday to Thursday, so payment is required/collect1Day interest.
Tuesday:1Overnight interest. Hold position from Tuesday to Wednesday, settlement days are from Thursday to Friday, so payment needs to be made/collect1Day interest.
Wednesday:3Overnight interest. Hold position from Wednesday to Thursday, settlement day from Friday to next Monday, so payment needs to be made/collect3Day interest.
Thursday:1Overnight interest. Hold position from Thursday to Friday, settlement day from next Monday to next Tuesday, so payment needs to be made/collect1Day interest.
Friday:1Overnight interest. Hold position from Friday to next Monday, with settlement days from Tuesday to Wednesday, so as long as payment is made/collect1Day interest.

Thank you for your continuous support

GKFX PrimeSupport and Trust

If you would like to learn more detailed information

You can contact us through the following methods

We will wholeheartedly serve you

Telephone:15801181351

QQ: 2220083555

mailbox: eddy.zhao@gkfxprime.com

Scan code to add customer service WeChat