Rollover of FX: Earn high yields by holding FX positions
What is rollover?
Rollover is like bank interest in FX trading.
By holding a position of buying a higher-interest currency and selling a lower-interest currency overnight, you can receive rollover corresponding to the interest rate difference. In reverse, you have to pay rollover by selling higher-interest currency and buying lower-interest currency. You will earn or pay rollovers daily while holding opened positions.
- Example
US has continued to raise interest rates while Japan has kept ultra-low interest rates. In this case, you can earn daily rollover by holding a buy position of USD/JPY pair.
*You have to pay rollover If you hold a buy position of a lower-interest currency
*The interest rate does not equal to the rollover rate
*Rollover rate is as of 30 June, 2023
Carry Trade : How to utilize rollover in FX strategy ?
Carry Trade is one of the most popular strategy in FX trading. In this strategy, Investors simply hold a high-interest currency buy position and a low-interest currency sell position for a long term, aiming to acquire daily rollovers from the interest rate difference.
Two benefits of Carry Trade:
1) Increase potential earning and reduce risk
Investors can increase the efficiency of earning profit by Carry Trade. By holding a buy position of currency with high interest rate and an expected price rise, in addition to the potential profit from the price difference, you can also expect to earn daily rollovers on the active position. Also, you can expect to cover any losses due to price differences between currencies with rollover profits.
2) Rollover can be leveraged
When a position is opened using leverage, the rollover earned is based on the full amount of the position, not the deposit required to open the position. With Rakuten FX, you can trade with up to 20 times leverage. However, it’s important to be aware that while leverage can magnify your profits, it can also magnify your losses. Also, if you keep the leverage low as 1x, you can get the same effect as a foreign currency deposit with low risk.
*An inverstor may suffer a loss if the target currency falls in value relative to the funding currency and the resulting losses offset the positive interest payments.
How much can you earn?
As mentioned above, you can enjoy competitive rollover rate by holding a USD/JPY buy position on our Rakuten FX platform.
Yields will continue to increase by holding a high-interest currency for a long period.
*The daily average is calculated by dividing the monthly actual values by the grant date (30th). It does not guarantee future rollover amounts.
*If you sell a currency with a high interest rate and buy a currency with a low interest rate, you will be charged a rollover.
*Rollover fluctuates daily depending on interest rates, it can change from positive to negative.
*In addition to swap gains and losses, there will also be gains and losses due to exchange rate fluctuations.
Currency pairs with high rollover rate
You can also earn competitive yields by holding buy positions in various currency pairs besides USD/JPY on our Rakuten FX platform.
Trading volume: per 100K Currency
As of 10 July, 2023
How to receive rollover?
- Rollover will be received or paid by holding an open position overnight.
- Rollover credit or debit amount will be reflected in your account balance in the next trading day, within an hour after market open.
- Rollover on Saturdays and Sundays will be reflected at once on Thursdays.
- Please see rollover schedule to check rollover on holidays.
Note to trade
- It is important to avoid high leverage as losses due to exchange rate fluctuations might exceed profit by rollover.
- Rollover fluctuates daily depending on interest rates, it can change from positive to negative.
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