Swap rates are the interest rate differentials embedded in currency trades.
To put it more simply, consider how a forex trade works: you borrow one currency to buy another. For instance, if you are buying EUR/USD, you are borrowing US dollars and buying euros with the proceeds. In doing so, you are paying interest on the US dollars you borrow, but earning interest on the euros you bought.
For the most up-to-date Forex swap rates, please refer to the Market Watch panel in our MetaTrader 4 (MT4) platform. Simply follow the steps outlined below
1. Locate your product in the ‘Market Watch’ window. Right click, and select ‘Symbols’.
2. Select the product you wish to view from the list. Select ‘Specifications’.
3. Open a trading account and deposit through one of our secure payment methods.
Swap rates are applied at 00:00 platform time.
Each currency pair has its own swap charge and is measured on a standard size of 1 lot (100,000 base units).
Swaps are applied each night onto your open positions and when the position is left open it is given a new ‘value date’.
On Wednesday night however, the new value date for a trade held open is changed to Monday. Due to this, swaps are charged at triple the rate. Check your swaps on your MT4 Market Watch panel. You simply right click, select ‘symbols’, select the instrument and then select ‘Properties’.
Swap debits/credits are calculated as follows:
Current long/short rate * number of lots = swap debit/credit in second currency
Your account currency is AUD and you hold one lot long on AUD/USD on 5 February 2015:
+4.96 * 1 = $.4.96, converted to your account currency = A$6.35
Account currency is USD, you hold 2.5 lots short of EUR/GBP on 5 February 2015:
-1.08 * 2.5 = -£2.70, converted to USD = -$4.13
Spread is the difference between a Bid and the Ask prices of each currency from a currency pair. In fact, this is a direct initial loss for the trader, which should be covered in the process of further trading.
Let's give an example on the popular EUR/USD pair with a hypothetical quote of 1.1152/1.1156. From the difference in the currency value, it can be seen that the spread in this case for one lot is 4 pips. To compensate for this loss, you want the currency pair quotes to change in your favor by at least 4 pips. Once this happens, you will start receiving a profit.
Spread = Ask (the price a buyer is willing to pay) – Bid (the price at which a market maker is willing to buy). Once again, set in pips for convenient calculation.
For example, if the quote of the GBP/USD currency pair is, bid = 1.2920 and ask = 1.2923, then Spread = 1.2923-1.2920 = 0.003 USD or 3 pips.
|Currency pair||Standard average spread|
|XAG USD | Silver Spot / US Dollar||19|
|XAU USD | Gold Spot / US Dollar||19|
|Currency pair||Standard average spread|
|AUD CAD | Australian Dollar / Canadian Dollar||18|
|AUD CHF | Australian Dollar / Swiss Franc||17|
|AUD JPY | Australian Dollar / Japanese Yen||17|
|AUD NZD | Australian Dollar / New Zealand Dollar||19|
|AUD USD | Australian Dollar / US Dollar||14|
|CAD CHF | Canadian Dollar / Swiss Franc||16|
|CAD JPY | Canadian Dollar / Japanese Yen||16|
|CHF JPY | Swiss Franc / Japanese Yen||18|
|EUR AUD | Euro / Australian Dollar||17|
|EUR CAD | Euro / Canadian Dollar||21|
|EUR CHF | Euro / Swiss Franc||14|
|EUR GBP | Euro / British Pound||16|
|EUR JPY | Euro / Japanese Yen||10|
|EUR NZD | Euro / New Zealand Dollar||25|
|EUR USD | Euro / US Dollar||11|
|GBP AUD | British Pound / Australian Dollar||32|
|GBP CAD | British Pound / Canadian Dollar||25|
|GBP CHF | British Pound / Swiss Franc||24|
|GBP JPY | British Pound / Japanese Yen||24|
|GBP NZD | British Pound / New Zealand Dollar||35|
|GBP USD | British Pound / US Dollar||16|
|NZD CAD | New Zealand Dollar / Canadian Dollar||20|
|NZD CHF | New Zealand Dollar / Swiss Franc||20|
|NZD JPY | New Zealand Dollar / Japanese Yen||15|
|NZD USD | New Zealand Dollar / US Dollar||13|
|USD CAD | US Dollar / Canadian Dollar||14|
|USD CHF | US Dollar / Swiss Franc||12|
|USD JPY | US Dollar / Japanese Yen||12|
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