ROLLOVER INTEREST ON FOREX POSITIONS
Rollover is the interest paid or earned for holding an open position overnight. Each currency has an interest rate associated with it, and may vary on a day-to-day basis. Forex is traded in pairs, every trade involves not only two different currencies, but their two different interest rates. In short, rollover is calculated based on the interest rate differential between the two currencies.
Most banks across the globe are closed on Saturdays and Sundays, so there is no rollover on these days, but most banks still apply interest for those two days. To account for that, the forex market books three days of rollover on Wednesdays. Likewise, there is no rollover on holidays, but an extra day’s worth of rollover two business days before the holiday. Typically, holiday rollover happens if any of the currencies traded has a major holiday.
Rollover can add a significant extra cost or profit to your trade.
TIMING OF ROLLOVER
Rollover credit or debit amount of your open position(s) will be reflected in your account balance in the next trading day, within an hour after market open.