How does holding a huge position overnight work in Forex as opposed to stocks? | Forex Factory

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How does holding a huge position overnight work in Forex as opposed to stocks?

  • #1
  • First Post: Jan 13, 2008 10:27am Jan 13, 2008 10:27am
With huge leverages in forex, you can easily have a position of over a million dollars. Since the forex market is open 24 hours, how are interests calculated? Won't you be broke just by paying interests on a million dollar position? I will be reading some books on currency trading very soon (as soon as they arrive!) but I just want to get some first impressions/answers from fellow members first.

Does the situation change when you are shorting a currency? (well, I suppose you are always going long and short at the same time on two currencies?)

Thanks.
  • #2
  • Jan 13, 2008 10:39am Jan 13, 2008 10:39am
Well that's pretty easy.
1M Contract means 10 Lots.
Overnight Swap for GBP/JPY
is 25.89$/100k Long
-29,79$/100k Short.

So if you buy 10 Lots GBP/JPY and hold it over night you'll get paid
258,90$ and vice versa. You'll find these Swap rates on everybrokers plattform.
  • #3
  • Jan 13, 2008 1:30pm Jan 13, 2008 1:30pm
Quoting highseasFX
With huge leverages in forex, you can easily have a position of over a million dollars. Since the forex market is open 24 hours, how are interests calculated? Won't you be broke just by paying interests on a million dollar position? I will be reading some books on currency trading very soon (as soon as they arrive!) but I just want to get some first impressions/answers from fellow members first.

Does the situation change when you are shorting a currency? (well, I suppose you are always going long and short at the same time on two currencies?)

Thanks.
If someone can afford the one million, they can afford the interest...easily. You should strongly consider taking a forex course or two before trading the forex.
  • #4
  • Jan 13, 2008 1:31pm Jan 13, 2008 1:31pm
Quoting Linus78
Well that's pretty easy.
1M Contract means 10 Lots.
Overnight Swap for GBP/JPY
is 25.89$/100k Long
-29,79$/100k Short.

So if you buy 10 Lots GBP/JPY and hold it over night you'll get paid
258,90$ and vice versa. You'll find these Swap rates on everybrokers plattform.
The swap rate actually depends on the broker.
  • #5
  • Jan 13, 2008 5:47pm Jan 13, 2008 5:47pm
I'm a novice, but when I mean a "one million dollar position" I mean $10000 with a 1% leverage. I'm not talking about someone with a million bucks and not using leverage. So, you only have $10000 and have to pay interests on $1000000--that is the scenario that I'm envisioning. I hope that clears up the confusion.
  • #6
  • Last Post: Jan 14, 2008 12:43am Jan 14, 2008 12:43am
Yeah like I said just look at the swap rates for 100k positions. It's easy.
They are not the same with all brokers but every Lot LONG G/J should earn you around 25$.
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