FX Rollover | FX Carry

The Rollover is the interest that is gained or lost on any open position held overnight, i.e. after 10 pm GMT. Each currency has a specific interest rate, based on the interest rate of that particular country; so therefore if the interest rate of the currency you bought is the higher of the two currencies, you will earn a positive Rollover; whereas if the interest rate of the currency is the lower of the two currencies, you will pay the Rollover. These amounts will obviously fluctuate day to day, as interest rates change. Rollover can add a significant extra profit to your trade.

For example:

If you are trading EUR/USD; The base currency is the EUR, and the quote currency is the USD.

Now let’s say hypothetically:
   •   The USD, has an interest rate of 2.75%
   •   The EUR, has an interest rate of 2.00%

Using this example, if you were to buy $1,000 USD, this is what would happen:
Since the USD has a higher interest rate, you will earn a positive rollover of 0.75% (2.75%-2.00%). On the other hand if you were to buy 1,000 Euros you will pay a rollover of 0.75%.

This interest is calculated daily, by the difference in the 2 interest rates. If there is a 0.75% difference, as in the example above, if you sell the EUR/USD, with an investment of $1000, this would amount to annual profit of $75, $1,000*1.075 (earned in the rollover, assuming market conditions stayed at a fixed rate).
Since Xforex offers you to trade using leverages of up to 400:1, it just shows the potential profit a rollover can produce. Using the example above, this means that if you were to trade in a leverage of 20:1, you would earn a positive rollover of $1,500 (20*$75).

Trading using the rollover is called ‘carry trade’ and is used by many traders and organizations.

At Xforex we automatically roll over all of your open positions at 22:00PM GMT to the next settlement date (i.e. the next trading day). We will automatically calculate and a report any roll over you have gained or lost, this will be displayed in your account.