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How do you calculate swaps?

Our swap rates are based on institutional swap rates from highly reputable sources. They are the interest rates that govern how much large financial companies pay or earn when keeping overnight positions and are usually expressed as a percentage. We translate these rates into points, which are the values you see on your trading platform.

Forex and Spot Metals

Swaps on forex and spot metals are calculated using the tomorrow-next day rate, with a small added mark-up. We don’t determine these rates, as they are derived from the interest rate differential between the currencies in the pair you’re trading.

Swap rate = Trade Size x (+/- Tom-Next Rate - Mark-Up)

Whether the tom-next rate is positive or negative depends on the interest rate differential between the two currencies. The amount calculated is then translated into your account currency.

For example, let’s say you’re trading USDJPY, and the tom-next rates are as follows:

+0.5% for a long position
-1.5% for a short position

We can see the interest rates in the US are higher than those in Japan.

If you were to hold a long position open overnight, you’d earn 0.5% minus our mark-up. If you held a short position, you’d be charged 1.5% plus our mark-up.

Stocks and Stock Indices

Rollover rates on stocks and stock indices are calculated using the underlying interbank rate. For an Australian stock for example, rollover is calculated using the interest rate charged by local banks for short-term loans, with a small added mark-up.

Rollover rate = (Trade Size x Closing Price) x (+/- Short-Term Interbank Rate - Mark-Up)

Here, the plus or minus depends on whether you’re holding a long or short position.

For example, let’s say you’re trading Unilever, a UK stock, and the interbank rate is 1.5% per annum.

If you were to hold a long position open overnight, the rollover would be -1.5%/365 minus our mark-up. If you held a short position, it would be 1.5%/365 minus our mark-up.