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EUR/CHF

  • #13,501
  • Dec 18, 2014 11:35am Dec 18, 2014 11:35am
got some information of possible default of Russia tomorrow, be coutius
  • #13,502
  • Dec 18, 2014 2:00pm Dec 18, 2014 2:00pm
Closed losing longs, but let the 1.2010 open.
Time for a fresh start, cut losses short, let winners ride. Hmm I have heard that already.
  • #13,503
  • Dec 18, 2014 3:10pm Dec 18, 2014 3:10pm
How does FXCM calculate their rollover anyway? I was changed $0.3 per lot, then $0.6 pet lot and then now $1.80 after yesterday's announcement. Shouldn't I get positive swaps if I long eurchf since chf is being charged negative interest rate?
  • #13,504
  • Dec 19, 2014 12:25am Dec 19, 2014 12:25am
Quoting mindscream
How does FXCM calculate their rollover anyway? I was changed $0.3 per lot, then $0.6 pet lot and then now $1.80 after yesterday's announcement. Shouldn't I get positive swaps if I long eurchf since chf is being charged negative interest rate?
There is the theorical swap that you can calculate which is the difference beetween interest rates.
Then brokers are supposed to add a "markup" to earn money for them.

The reality is that they can do whatever they want and change it whenever they want.
As a lot of people are long EUR/CHF and keep their position for a long time, brokers will have the tendency to abuse a little and charge more on the swap.

It's unfair but it's the reality of how it works.
At the same time, "regulators" are supposed to be here to protect the traders, yeah, sure.

What's really unfair in fact is not how much swap they charge. We are supposed to be in a free market, anybody is free to set their prices. But they will raise swaps when a lot of people are in the position, like if a supermarket was charging you more than the advertised price when you arrive at the cashier. At the supermarket you could still not buy at this moment, but with a forex broker, you are in the position, paid the spread in and have to pay the spread out if you don't want to pay the swap anymore.
  • #13,505
  • Dec 19, 2014 2:36am Dec 19, 2014 2:36am
Quoting Mevo
{quote} There is the theorical swap that you can calculate which is the difference beetween interest rates. Then brokers are supposed to add a "markup" to earn money for them. The reality is that they can do whatever they want and change it whenever they want. As a lot of people are long EUR/CHF and keep their position for a long time, brokers will have the tendency to abuse a little and charge more on the swap. It's unfair but it's the reality of how it works. At the same time, "regulators" are supposed to be here to protect the traders, yeah,...
Somehow, I suspect their system is not calculating negative interest rate correctly. Maybe it is incapable to do that. In any case, negative interest is suppose to start on Jan 22, no? Sudden spike in swap in succession within a short period of time is quite puzzling to me.
  • #13,506
  • Dec 19, 2014 3:51am Dec 19, 2014 3:51am
Quoting mindscream
{quote} Somehow, I suspect their system is not calculating negative interest rate correctly. Maybe it is incapable to do that. In any case, negative interest is suppose to start on Jan 22, no? Sudden spike in swap in succession within a short period of time is quite puzzling to me.
You're so naive. I understand, it makes more sens to believe it's some kind of "error", rather than believing it's done 100% on purpose. But trust me (or not), it's absolutely not an error.
  • #13,507
  • Dec 19, 2014 3:55am Dec 19, 2014 3:55am
Quoting mindscream
{quote} Somehow, I suspect their system is not calculating negative interest rate correctly. Maybe it is incapable to do that. In any case, negative interest is suppose to start on Jan 22, no? Sudden spike in swap in succession within a short period of time is quite puzzling to me.
I don't think they calculate anything. it's a market maker decision, in this case it means "we've been generous with this before (compared to other brokers), now as things look better for longs, if you want to stay long you have pay more"
Yeah I know it's a long statement compressed in two small numbers.
  • #13,508
  • Dec 19, 2014 4:22am Dec 19, 2014 4:22am
Totally agree, How else you would explain some brokers had positive swaps while majority have negative on EUR/CHF - its a way how they make money
  • #13,509
  • Dec 19, 2014 4:46am Dec 19, 2014 4:46am
On such paris like EURCHF which are de facto pegged currencies brokers can set very off market swap rates and financial formulas will not be helpful here
  • #13,510
  • Dec 19, 2014 4:56am Dec 19, 2014 4:56am
Closed my last long, ready to re-enter later. But most important:

There are some other 30 pairs, time to give them a look!

  • #13,511
  • Dec 19, 2014 6:15am Dec 19, 2014 6:15am
About the swaps - as I know, they are connected to the Libor - Euribor (whatever) interest rates, which vary daily/weekly... Of course those are regulated by the central bank rates, but they float, change... We had like 2 years ago a discussion about it at this forum, and one or two of our traders made everything professionally clear, and they have given sources to check what would be the "fair" or "pure" swap without the brokers profit on the swap or/and without their distortion... (as I remember - something by oanda, and saxo might have some info on their pages.) My broker changes the swaps normally once a week...
The brokers do, whatever they want with swaps... One of their weapon to encourage/discourage their traders to trade certain pairs (or styles, like keeping ECh longs for weeks/months) - is the spread, another one is the swap and again another one is the leverage. Good example is the Ruble. No retail broker wants to trade their traders ruble pairs due to recent extreme volatility. My broker has normally max. 1:500, for the rubles they changed to 1:10. The swap is for long -100, for short is -20!!!. Two days ago it was -46 and +8. Before that it was some -10/+10. At some brokers it is a brutally clear sign, what they do with the ECh swaps. Or leverage (saxo, ducas). And the widened spreads... (fxcm, alpari) Oh boy...
  • #13,512
  • Dec 19, 2014 7:30am Dec 19, 2014 7:30am
Hi guys. Instead of speculations, do a research of How, What exactly, Who would be affected, etc... when the negative rates will be activated on the 22th Jan. I am searching already...
  • #13,513
  • Dec 19, 2014 7:30am Dec 19, 2014 7:30am
Quoting Fana
Hi guys. Instead of speculations, do a research of How, What exactly, Who would be affected, etc... when the negative rates will be activated on the 22th Jan. I am searching already...
post here please... news, links... Apreciated
  • #13,514
  • Dec 19, 2014 8:04am Dec 19, 2014 8:04am
price action clearly points to some persistent heavy bids at 1.2030 (hint:SNB)
  • #13,515
  • Dec 19, 2014 9:22am Dec 19, 2014 9:22am
it is going to the floor again and then what? cut again ? why they don't just raise the floor, Jordan said once that it was in the SNB toolkit, but he also said that they are not in the business of fine tuning. any thoughts?
  • #13,516
  • Dec 19, 2014 9:22am Dec 19, 2014 9:22am
to recap, snb introduced neg rate, ec went all the way up to 1.2100, then naturaly some profit taking, cross drops back to 1.2060.
Ec trading now again closer to the floor than to 1.2050.90% of retail at least are long.
So there is a central bank floor, neg rate, huge longs on retail side, and this cross keeps on falling.. Not sure hft, hedge funds are trying to push it higher, otherwise it would already be at 1.22+
So next time it will drop to 1.2007, we might see another big attack of snb's 1.20 floor. Not sure if it a the direct objective of big mkt player or its indirect via $ and chf buying, but long positions are now becoming worrying. Specially if snb introduce neg rates to stop intervening and buying fx..
  • #13,517
  • Dec 19, 2014 9:24am Dec 19, 2014 9:24am
Quoting insider-
it is going to the floor again and then what? cut again ? why they don't just raise the floor, Jordan said once that it was in the SNB toolkit, but he also said that they are not in the business of fine tuning. any thoughts?
Might be the only solution to stop big mkt players from attacking the floor
  • #13,518
  • Dec 19, 2014 9:38am Dec 19, 2014 9:38am
SNB has trying everything to avoid direct intervention and spending a single swiss buck.

Reiterated lip service, then rate adjustment outside meeting to reinforce the message that they are vigilant and active.

Once pair is at the floor again they may have gained some time, but the situation may have deteriorated and they will have either to press the big button, or just let things go and let the market correct itself, as inevitably happens.
  • #13,519
  • Dec 19, 2014 9:47am Dec 19, 2014 9:47am
what holds the SNB from raising the floor? what are the implications for such move?
  • #13,520
  • Edited 12:35pm Dec 19, 2014 9:53am | Edited 12:35pm
Quoting insider-
what holds the SNB from raising the floor? what are the implications for such move?
economically that they will would have to enlarge the balance sheet and that is not said to be a good thing

politically that they would devaluing currency, thing that for the layman is perceived worse than damaging the economy.
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