What is spread and swap. What is spread in Forex? What is spread in simple words

It is easy for a novice trader to get confused in the variety of terms inherent in the foreign exchange market. Spreads, swaps, broker commissions - in which case and for what should a trader pay? What is the difference between payments? How is billing and payment done? Are there trading accounts without any commissions? We will try to find answers to these questions in this article.

How does a broker earn?

Any beginner should know right away that there are no trading accounts without any commissions on the Forex market at all, just as there are no altruistic brokers who provide access to the foreign exchange market for traders for free. For some, the commissions are included in the spread, and somewhere the trader pays an additional commission for operations. In any case, there is a fee for using the trading platform and the opportunity to earn on currency speculation. Only its shape changes.

If the company works on a brokerage scheme, it receives a percentage of the total volume of transactions made by traders. It is beneficial for her that the turnover grows, and currency speculators earn, and not lose money.

What is spread in Forex?

The commission is of two types. In the first case, the company charges a fixed fee, regardless of the volume of the transaction. That is, it does not matter for the broker whether an order is open for 0.1 lots or 10 lots. In both cases, the commission will be the same. Accounts of this type are rare in the market and are suitable for traders with large capital. At the same time, the volume of the order should be such that the commission is a small percentage of the average profit.

The second type of broker's commission is directly dependent on the volume of the transaction. Many brokers form a whole range of tariffs when calculating the commission in such a way that larger transactions are more profitable for traders. The interest rate is reduced for transactions whose volume exceeds a certain amount set by the broker.

Most brokers charge a commission only for opening or only for closing a trade. There are companies that charge a double fee - when opening an order, and in case of closing it. This information is usually specified in contract specifications, but not all traders study it carefully.

Swaps in Forex

Swaps differ significantly from broker commission and spread. A swap is a fee for transferring a position to the next trading day. Many traders do not come across this term because they trade intraday and close orders before midnight. There are also swap-free accounts, where there is no fee for transferring positions as such, but its size is included in the commission. The size of the swap differs for different currency pairs and depends on the interest rate of those countries whose currencies you trade.

So when buying a euro-dollar currency pair, you buy a European currency (borrow it from a broker) for your own funds, that is, for dollars. For euros, the broker charges interest for the use of funds at the EU lending rate. For American currency, you will be charged interest at the deposit rate of the US Central Bank. The difference between these values is the swap. Similar actions occur when selling currencies in Forex.

The swap can be either positive or negative. The first is less common than the second. A positive swap occurs when the deposit rate exceeds the credit rate. Otherwise, the swap size is negative. Sometimes brokers include their earnings in the swap amount. On the night from Wednesday to Friday, the size of the swap is tripled. During this time, the broker charges a rollover fee for Saturday and Sunday, as the foreign exchange market does not operate on these days.

The size of the swap plays a role for traders who prefer long-term trading strategies. The size of a positive swap is usually small, so the profit does not increase significantly. Previously, its size was much higher. There were even strategies for making money on swaps. The negative swap is much larger, so you should take into account its value when planning transactions in long-term Forex trading strategies.

Currently, there are various variations of trading accounts from brokers. There are accounts where the company charges both spreads, broker commission and swaps at the same time. There are accounts where there is only spread or commission, however, their size may be higher than the sum of all accruals on accounts that combine all payments in one place. To understand which option is beneficial for you, you need to calculate the costs for different types of accounts in relation to your trading strategy.

Having started his activity in the foreign exchange market, opening a trading order (an order to a broker to open, close a position, or change the parameters of an existing position), a trader is faced with such concepts as spread and swap in Forex.
Spread is the difference between the values of the buying and selling rates of currencies. Measured in points. For example, the GBP buy rate for USD is 1.7445, the sell rate is 1.7449. The spread in this case is 0.0004 or four points.

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Can take a simpler example - the usual item for "exchange". Near the window, the price at which the currency is bought and sold is always written, i.e. the same spread. It contains the income of the "exchange". It is also the income of the Forex broker. But each broker has its own spread size, which he tries to make as small as possible to attract the attention of traders.

Most low spread for brokers providing their services through the electronic system. The main goal of this system is to eliminate resellers, bringing the seller and the buyer directly. The income of an ECN broker will consist of a small commission from each trade transaction, and will depend on the number of trading tools used by the trader, i.e. e . the higher the transaction volume, the lower the commission.
The real spread of the currency market depends on the current orders of the bidders. At the peak of the highest activity, when the currency market is very sensitive to the slightest price changes, the spread will have a minimum value. And vice versa, in conditions of the least activity - maximum.

In certain situations, for example, during the release of unexpected news, the real spread can change dramatically and the trader in this case risks closing the position at an unfavorable price. Based on this, some brokers set a fixed spread, which, according to them, is a guarantee that the transaction will be closed at the agreed price. But as it turns out, the fixed spread can initially be calculated taking into account the fact that most of the time the market spread was lower than the fixed one. In other words , using a fixed spread , you do not guarantee yourself against overpayment .

(English swap literally change , change ) is the percentage or fee charged for carrying out the transfer of a trade transaction to the next day . Since its end time is not specified , credit and deposit transactions occur on the next business day .

Banks are established as a means of insurance against possible risks of changes in interest rates and fluctuations in exchange rates of traded currencies. Has a positive or negative value, depending on the interest rates on the currencies of the countries involved in the trade and installed central banks. If the currency being bought has a higher interest rate than the one being sold , the swap will be positive , if less it will be negative .

Information about the swap of trading pairs (swap table) can always be found on the Forex broker's website or read it in the trading terminal. Last but not least , if you roll over your trading position over the weekend , you will be charged triple the amount from Wednesday to Thursday . This is the swap for Saturday and Sunday.

Thus, the spread and swap on Forex are the very basics that make up the “alphabet” of a trader, and the task of each participant in the Forex currency market is to be able to operate with them to generate income.

The difference in the price of various assets, whether it be currency, stocks or precious metals, is the one and only source of income on the exchanges. It is on price fluctuations that traders earn serious money, using various statistical tools and information channels for accurate investment forecasting. At the same time, you can earn both by increasing and by decreasing the value of the object of trade. In any case, such an important concept as a spread will participate in such operations - the difference between the best buying and selling price of an asset at the moment.

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The minimum spread and low commission are the key advantages of the AvaTrade brokerage platform!

What is spread in simple words

In order to understand what a spread is on the stock exchange, it is enough to imagine any trading operation - for example, buying clothes with further resale. The difference between the price originally paid and the money received in the course of speculation in everyday life is called profit or income. The spread is an analogue of this difference, and in this case, brokers receive income.

In the foreign exchange market, transactions are not made on all positions. Therefore, to evaluate specific trades, the concept of spread is used, which, in fact, reflects the liquidity of this market. The greater the difference between the price of buying (ask) and selling (bid) a currency, the lower is the liquidity of the market. In the sense that it will be very difficult to sell this position quickly for a profit. By analogy with the above example, if you “pull up” the price of a resold coat too high, then it will be quite difficult to sell this product.

What is spread in trading

What factors affect the spread

Liquidity (popularity) of a currency pair. In the most popular tandems, the spread usually does not exceed 3-5 points, and when trading rare currencies, for example, the Canadian dollar or the Swedish krona, this figure can reach 50 points or more.
The current market situation, which in turn depends on economic and political factors in different countries and in the global community as a whole. Any "hot" news that can affect the rates of leading currencies significantly affects the size of the spread.
The presence of affiliate programs, the participants of which receive remuneration precisely at the expense of the spread. By the way, the rapid growth of affiliate programs in this segment contributes to an increase in the size of this fee, which is an inevitable “headache” for any trader.

Conclusion

Considering and keeping track of the size of the spread in trading, you can more accurately calculate the profitability of each transaction. This parameter is also actively used to evaluate

Each novice Forex trader should take into his arsenal two basic concepts - swap and spread, because it is with the help of the phenomena that lie behind these definitions that he will be able to subsequently generate profit.

So, what is spread? This word comes from the English spread, which in the most general sense can be translated as "spread". In principle, this term is present in many markets, not only in foreign exchange, and it means the profit of the speculator, or the difference between the sale price and the purchase price. forex spread represents the difference between the selling (ask) and buying (bid) prices of a foreign exchange contract fixed at a given exact moment in time. It is easy to assume that this is a dynamic value, constantly changing for each market instrument.

The essence of the spread is most clearly illustrated by the work of an ordinary currency exchange office. Everyone knows that these institutions sell any currency at a higher price than they buy. The difference between these values is the remuneration of the exchange office for the service provided, and in the same way, the size of the spread determines the "commission" of a dealing center. Each of them can be declared as floating (depending on important news, fundamental market changes, currency pair liquidity, transaction volume and even trader status), and fixed spread. At first glance, the second option is better for the trader, however, even with a fixed value of at least one point, the spread can still increase or decrease - if the dealing center considers this state of affairs to be necessary. Therefore, which one to give preference to depends on the market participant and his strategy, however, before neglecting one or another broker, it should be borne in mind that many of them practice a partial return of the spread as a kind of “thank you” for attracting clients.

A professional, competent trader must not only put up with the spread value that exists within the dealing center, but also be able to manage it, using it to generate income. To this end, special strategies are being developed, the successful implementation of which is the key to the successful operation of an agent of the international currency market. For example, "advanced" traders actively use a complex aggressive (characterized by high profitability and increased risk) strategy based on the concept of " diagonal spread". This is one of the best ways to work with options, but it is only suitable for traders who are completely confident in their strategy.

Then what is swap? Translated from English, swap means “to change”, and in relation to forex, this term is used to refer to the transfer of one or another open trading position through the night. In practice, this process is implemented as follows. The bought currency from the pair is conditionally placed on the deposit, and the sold one is taken on credit. The difference between the deposit and lending rates for this position in points is the swap. For example, a certain trader opened a long position on the Gbp/Usd pair for more than one day. After midnight, the interest rates of both the dollar and the British pound will change, and in the morning this change will directly affect the trader's account. If the difference between the two rates is positive, then the swap is credited to the trader's account; if it is negative, the swap is deducted from the account. As it is easy to see, it is possible to build your own profit-making strategy based on forecasting future changes in both rates.

Thus, the concepts of spread and swap are the very basics that make up the “alphabet” of a trader, and the task of each participant in the forex currency market is to be able to operate with them to generate income.

Hello dear friends! clearly answer the question what is swap in Forex and give a clear description of the methodology his calculation maybe not everyone, even the most seasoned, trader. For most, swap remains a small amount that the broker deducts from the account once a day. Not everyone understands how it is calculated and what it is. Today I propose to fill this gap in knowledge and figure out in how swap affects trading, what determines its value and whether it should be taken into account when evaluating the effectiveness of a strategy.

Understanding terminology

As for the term swap, the translation of this word into Russian sounds like " interest rate difference" (you will also meet the term " rollover These terms are synonyms). We will analyze the essence of the swap on a specific example of transactions on a currency pair GBPUSD.

We are interested in interest rates for both currencies. We will talk about where they can be found a little later, for now we will only indicate that in England the rate is 0.75% , and in the USA 2.25% . Now for the swap for long positions:

When a buy deal is made, the trader buys the British pound for dollars;
At the same time, you do not have the necessary amount of dollars, margin trading(with leverage), which means that the broker borrows the required amount for you. The interest on this loan is 2.25%;
For this amount in dollars, you buy pounds and get 0.75% on them;
Imagine that this is an ordinary bank loan for a period of one day, and tomorrow you will sell pounds and repay the loan in dollars. But because of the difference in interest rates, you will miss 0.75 – 2.25 = -1.5%. This will be the size of the swap.

Imagine the opposite situation - a short position on GBPUSD. In it, due to the same difference in interest rates, you will receive 1.5%. Rollover is not necessarily a loss, it all depends on the ratio of interest rates of the respective currencies. Brokers give the value of this parameter in points for the convenience of calculations.

The formula for calculating swap also includes broker commission, so I recommend instead of calculating it yourself use data from the company's website. The procedure for determining this value is different for different instruments. For Forex, CFD - will tell you more about this type of trading, cryptocurrencies, the commodity market, the calculation formulas are different.

The video below describes in detail how swaps appear in trading.

Accrual procedure

In fact, traders, entering into transactions, do not need a currency, they just spend speculative transactions with currency pairs. Therefore, every day in the evening the deal is closed and the broker immediately concludes it for you, while the swap is charged. This procedure takes place almost instantly, so you are unlikely to notice the transfer of the position, only a small amount is credited or debited from the account.

Despite the fact that the Forex market works with a weekend break, swap is charged for all days of the week, including transferring a transaction through Saturday and Sunday. Since brokers have a rest on the weekend, the swap cannot be written off, so swap in triple size deducted when the transaction is postponed from Wednesday to Thursday. This is due to the fact that Forex settlements on concluded transactions are carried out in 2 days. Therefore, a 3x swap is charged in the middle of the week. There are exceptions for some instruments, for example, for USDTRY Swap is charged in the amount of x3 when a trade is moved from Thursday to Friday. As for the accrual time, this happens in 01:00 UTC.

Where to find out the amount of swaps

It makes no sense to independently calculate a currency swap. This reference value and it is available both in the trading terminal and on the websites of companies in the description of trading conditions.

Swap in the trading terminal

In the terminal window, right below the charts with currency pairs, a swap is shown for each open deal. If you accidentally closed this window, you can return it through the tab View-Terminal or keyboard shortcut ctrl+t.

You can also view in the terminal detailed specifications each instrument. In the window Market Review(left side of the terminal) right-click on the instrument of interest and select the item Specification.

The window that opens contains not only information on the size of the swap, but also the day when it is tripled.

You will find the same information on the broker's website.

Swap on the broker's website

Swap information is specified in contract specifications. It is given on the website in the section with trading conditions, there may be a separate item Contract specification. Below I will give the appearance of these sections for different brokers.

Exness

For each available instrument, the spread, margin for leverage, Stop Level and swap are indicated in points, specify its value Here . There is also a calculator for calculating the swap, depending on the holding period of the transaction and other initial conditions.

Open an account with Exness broker

fxpro

In chapter Commissions and Swaps contained calculator, which allows you to estimate the cost of spread and swap when trading. Here, a detailed explanation is given on the methodology for calculating these values, the broker's commission is indicated. Swap information is given and in tabular form . You can read the link, the company is quite suitable for opening a main trading account here.

Alpari

Everything is standard in the table assets are classified into groups, and for each group a swap for purchases and sales, a trading schedule, a spread are indicated.

Opening an account with Alpari

Amarkets

The same situation as with other brokers. True, assets Here all together, it is not very convenient to choose the right one.

Registration

Let's compare swap for 4 currency pairs with these brokers:


+0,050	-0,160	+0,360	-0,560	+0,270	-0,550
-0,329	-0,468	+0,263	-0,831	+0,158	-0,809
-0,161	-0,134	+0,309	-0,656	+0,204	-0,62
-0,061	-0,184	+0,407	-0,692	+0,3	-0,62

As you can see, there are differences in swap, it may differ on some currency pairs almost 2 times. But in money terms, these are such small amounts that most traders will not feel this difference. For it to begin to affect the results, you need to work with capital in the tens and hundreds of thousands of dollars.

If you want to compare brokers by rollovers, use . In the tab Brokers there is a related item. It's very convenient that it's not just a table. You can add any currency pair to it and arrange the search results in descending or ascending order. In a couple of clicks, you can find a company with the maximum or minimum swap.

Information on interest rates of world banks

If you need to choose a pair for which the smallest negative swap or the largest positive one, it is convenient to do this by comparing the interest rates of the world's banks. Above, we have already figured out that rollovers may differ for different brokers for the same currency pairs due to the fact that the commission is different. But in general, when comparing the rates of banks, it is convenient to select currency pairs, and then make a comparison by brokers.

Below is a list of resources on which you can monitor interest rates:

Information on rates is not secret and you can find it with other brokers. Just make sure that the data is updated regularly and consistent with the latest changes. For Russian-speaking traders, I recommend using the information from Alpari - everything is implemented as convenient as possible.

Islamic accounts - benefit from trading without swaps

A swap is, in simple words, an operation that has signs usury. In Islam, the exchange of currencies is not prohibited, but only on the condition that the exchange takes place no break in time and in the same proportion, that is none of the parties remain in debt. From this point of view, rollovers are contrary to the norms of this religion.

That is why almost all brokers offer clients the so-called Islamic or swap-free accounts. For them, instead of rollovers at the end of the day, a fixed amount is charged from the account commission. The term itself islamic account" does not mean that only Muslims can work with them, regardless of religion, you can turn off the swap if the broker allows it.

Of the features of working with this account, I note:

Most brokers have a service swap free you need to connect through a personal account or technical support. This option is not available for all accounts, for example, Amarkets the service is available only on invoices Gold, Platinum.

Read the trading conditions carefully. Sometimes offers are more profitable than swap-free accounts. For example, at fxpro those who trade cTrader only pay commission $4.5 for the traded lot, besides, the spread for majors here is from 0.4 points. It's really beneficial. For example, if a deal with a volume of 1 lot for EURUSD held for 5 days, FxPro's swap loss will be $54 - about 5 pips. If, under the same conditions, work was carried out in cTrader, then the commission due to the trading turnover would be $10.2.

For those who work with holding position from a month or more, I recommend trading on Islamic accounts. Exception - carry traders and those who plan to trade zero or small positive swap pairs.

If you work for majors and you hold transactions for a maximum of several days, then the swap can be neglected. Usually, with such a trade lifetime, the targets exceed 100-150 pips, the loss of 4-5 pips due to rollover is negligible compared to the profit.

If your trading is something in between, with both trades with a couple of weeks holding time and faster trades in the account, look for offers with improved swaps. For example, at Amarkets For Platinum accounts, negative rollovers are reduced by 30%, and positive rollovers are increased by a third.

Curry trading - making money on swaps with a guarantee

Swap earning strategy in theory win-win. Briefly describe the essence:

We need 2 reliable brokers. One of them must support islamic accounts. From the other, we select a currency pair with maximum positive swap. We open accounts with them, there is an instruction for opening a real account, if you have not done this before, I recommend that you read it;
We open multidirectional deals for the selected instrument. The lot is the same, we do not set stops, as well as TR;
As a result, every day we get a small profit due to a positive swap, and due to the lock from multidirectional transactions, we do not lose money on the movement of the chart.

The circuit looks perfect, but there is nuances:

Need big money to earn a tangible profit;
Swap is a fickle value, may decrease, the profit on the vehicle will also decrease;
In addition to the considerable costs of deposits, you need reserve amount for refilling on the account on which the loss will accumulate due to the movement of the chart.

As for the pairs, you need to select those for which positive swap maximum. This does not happen at majors, so we pay attention to exotic currency pairs. Not bad for curry trading are currencies that have survived devaluation: Central banks are forced to raise rates to slow down the fall.

Below are a few pairs with a swap in dollars for lot 1.0 (broker Exness

Here are some brokers by payout level. As you can see Alpari and Exness look good in the overall ranking. If capital allows, take a closer look at this strategy. Explore Spreads, there are calculators on the Exness, FxPro sites for calculating them, so there will be no difficulties.

conclusions

Rollover is not a fraud on the part of the broker and not an attempt to cash in on your gullibility. Write-off of this amount necessity, due to the specifics of trading on Forex and other financial markets. With intraday trading and holding periods of a few days, it can be neglected.

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