Rollover on Forex Trading
Rollover In Forex Trading in this post we will discuss the rollover concept, how to calculate it when trading forex and will also be delivered on how you can benefit from rollover.
Rollover is the interest paid or profits received when opening a forex trading position overnight. The amount of interest depends on the type of currency that is being traded, the amount of which is determined by the Central Bank of each country.
As we have discussed before that when you are trading forex you are actually buying a country’s currency and selling currencies of other countries for example Buy EUR / USD means you are buying a Euro currency (EUR) and selling Dollar (USD).
When you buy a Euro currency (EUR) you will get the interest of the Euro currency bank and will pay the interest of the bank of the dollar (USD) for selling it. The amount of the bank’s interest difference when buying and selling the currency will then be included in your capital but it must be remembered that recording this rollover value only occurs at 5pm Eastern Time . If you close the position before rollover time or close the position after the rollover time , the bank interest will not be entered into your account’s capital because it hasn’t been overnight yet 🙂
Usually you don’t need to calculate this rollover because your broker has calculated each lot of currency pairs that you trade as shown in the following picture.
In the EUR / USD quote dashboard it can be seen that the total RollS (Sell Rollover) is $ 0.62 and RollB (Rollover Buy) is – $ 1.82 if our transaction closes at 5pm Eastern Time (overnight).
If you don’t want to get bank interest you might be able to talk to the broker where you opened the account. And usually brokers provide accounts that will not receive bank interest so what are you waiting for? Sorry for calculating the rollover we connect to the next post, bro 🙂