• What is Swap Point (Rollover Fees)?
• How XTB processes Swap Points (Rollover of Positions)?
• How to calculate the value of the rollover fee?
  1. Example A
  2. Example B
• Swap Points for Commodities and Bonds
• Positive Base and Negative Base

What is Swap Point (Rollover Fees)?

Trading Forex from the financial perspective means borrowing one currency, converting it to another, and depositing it, done on an overnight basis.

Each day trader pays the overnight interest rate on the borrowed currency and at the same time earns the overnight rate on the currency being held.

As result, the trader is either paying out or receiving interest on their position, depending on whether the interest rate differential is for or against him/her.

Owing to the cost of carry and financing the positions the same is true for other markets quoted on the OTC basis, commodities, stock exchange indices and shares.

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How XTB processes Swap Points (Rollover of Positions)?

If the trader is long on the currency with the significantly higher interest rate in the pair, he should gain profit on the spot rollover procedure.

The amount of profit is determined by the interest rate differential between the two currencies, and subject to daily market fluctuations.

In the case of day traders this procedure does not have any impact on the portfolio, as they never hold any position overnight.

XTB automatically rolls over all open positions to the next settlement date at 00:00 (GMT+1).

At this time investment account is charged or credited appropriate sums of money.

Rollover fees are shown in currency points, and are posted in the “swap column” on the XTB’s trading platforms.

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How to calculate the value of the rollover fee?

Rollover fee = numbers of contract * value of the swap point given

Here are some examples of swap points credit / charge:

Example A

Investor has a long position of 2 lots GBP/USD. He decides to maintain it till the next day.

The value of the Swap Point (taken from the “Swap Points Table”) for long position for GBP/USD is -0,400.

The value of one pip for GBP/USD is:

10 USD = 100 000*0,0001

The account will be credited/charged the following sum of money:

8 USD = 2 (number of lots) * (-0,400) value of the swap point taken from the “Swap Points Table”) * value of one pip = 2*(-0,400) * 10 USD

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Example B

Investor has a short position of 5 lots GBP/USD. He decides to maintain it till the next day.

The value of the Swap Point (taken from the Table of Swap) for short position for GBP/USD is +0,300.

The value of one pip for GBP/USD is

10 USD = 100 000*0,0001

The account will be credited/charged the following sum of money:

15 USD = 5 (number of lots) * 0,300 (value of the swap point taken from the “Swap Points Table”) * value of one pip = 5 * 0,300 * 10 USD

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Swap Points for Commodities and Bonds

Certain financial instruments quoted on the XTB platform like heating oil (HEATINGOIL), natural gas (NATGAS), unleaded gasoline (GASOLINE), oil (OIL), soybean (SOYBEAN), corn (CORN), wheat (WHEAT) and 10-year US Treasuries (TNOTE) are based on futures contracts with certain delivery dates.

Swap points are added or subtracted in the process of substituting one contract on expiration date for another one with a different delivery date.

These swap points reflect the difference between the prices of those two contracts on substitution date.

In order to make this process transparent, XTB introduces a mechanism that will correct swap points at the time of rolling the delivery date of the contract.

The date of delivery for underlying instruments of HEATING OIL, NATGAS, GASOLINE, OIL, CORN, SOYBEAN, WHEAT, TNOTE are shown in the table below.

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Positive Base and Negative Base

The amount of swap points that are added or subtracted depends on the base.

In the case when the underlying instrument’s price with delivery on the next delivery date is higher than the price of this instrument with delivery date in the current month, we have a positive base.

In the opposite case, we call it a negative base.

In the case of a positive base, a client having a long position on delivery date in one of the instruments mentioned above will notice negative swap points in the “swap” column, while a client having a short position will be given the same amount of swap points.

In the case of a negative base, a client having a short position on the end of delivery day will have to pay swap points equal to the base, while a client having a long position will be given with the same amount.