Financement

The FX Spot market is used for immediate currency trades. The term “Spot” refers to the standard settlement convention of two business days after the trade date (known as T+2)1 . For example, a EURUSD trade executed on a Monday will settle on a Wednesday (if there is not a public holiday in either currency on Tuesday or Wednesday, in which case the trade will be settled on the next available business day). The settlement period refers to the amount of time that is allotted to both parties to satisfy the trade’s obligations. At Saxo, FX Spot trades do not settle. Instead, open positions held at the end of a trading day (17.00 Eastern Standard Time) are rolled forward to the next available business day2.

The rollover is made up of two components; the Tom/Next swap points (Forward Price) and the financing of unrealised profit/loss (Financing Interest).

1. Tom/Next swap points (Forward Price)
The swap points used are calculated using market swap prices from Tier-1 banks, plus/minus a mark-up corresponding to +/- 0.45% of the Tom/Next interest swap rates. The final rate is used to adjust the opening price of the position3.

2. Financing of unrealised profit/loss (Financing Interest)
Any unrealised profit/loss on positions that are rolled from one day to the next are subject to an interest credit or debit. The unrealised profit/loss is calculated as the difference between the opening price of a position (possibly corrected for previous Tom/Next rollovers) and the Spot price at the time that the rollover is performed.

The rate is calculated based on the daily market overnight interest rates plus/minus a mark-up corresponding to +/- 2.00%. The final rate is used to adjust the opening price of the position3.


1 The standard settlement convention of T+2 is applicable for the majority of currency pairs; however there are exceptions to this rule e.g. USDCAD, which has a settlement convention of one day after the trade date (T+1).

2 The global market convention is that the value date rolls forward at 17.00 Eastern Standard Time, however there are exceptions to this rule e.g. NZD, which rolls forward at 07.00 New Zealand Daylight Time.

3 Applicable to the default rollover methodology.

Example: Buy 100,000 EURUSD Spot on Monday, Sell 100,000 EURUSD Spot on Tuesday.

DayValue DatePositionDescription
MonToday (“T”)+100,000» Trade to buy 100,000 EURUSD T+2 at 12.00 GMT

 

TueT+1-100,000» Trade to sell 100,000 EURUSD T+2 at 03.30 GMT
» Opening (buy) position rolled from T+2 to T+3 at 10.00 GMT4
» Unrealised profit/loss available in MyAccount from 10.00 GMT5
» End-of-day files available from 10.00 GMT
WedT+2 » Realised profit/loss available in MyAccount from 00.00 GMT
» Forex Rollover report available from 04.00 GMT
 

4 From a Best Execution perspective, the market price for each currency is observed in the trading session with the best liquidity on average. This means that market prices in all currencies, except SGD, HKD, CNH, THB, are observed in the European session between 08.00 and 10.00 GMT. For SGD, HKD, CNH and THB, market prices are observed at 14.00 Hong Kong Time.

5 The opening price of the position is adjusted by the Forward Price and Financing Interest, at which time unrealised profit/loss is available to view in MyAccount.

In order to provide full transparency to clients, we publish the swap points used for the Tom/Next rollover once a day.