Swap Policy

Reference Rate

Every transaction consists of long and short sides. By opening a trade, a trader has a long position in one asset and a short position in another asset at the same time. When a position is held overnight, swaps occur, i.e. an interest is paid or earned due to the interest rate difference between the instruments. Finteria uses reference rates for each currency based on various financial instruments in the money markets such as LIBOR, Fed Funds, bank deposit rates, and others.

The table below includes reference rates used by Finteria for defining the swap policy. Finteria charges an additional markup 1 %.

Swap Calculations

See the example of a swap calculation on EURUSD below:

  • Refference rate on EUR 0.25%
  • Reference rate on USD 1%
  • Rate differencial on Long = 0.25% - 1% = -0.75% - 1% (markup) = -1,75%
  • Rate differencial on Short = -0.25% + 1% = +0.75% - 1% (markup) = -0,25%
  • Daily swap on Long = -1,75% / 360 days = -0.0049%
  • Daily swap on Short = -0.25% / 360 days = -0,0007%

Swap points

The swap points per each instrument are diplayed on Instruments page.

Value Dates

A value date, also known as a settlement date, is the date when an FX transaction is settled and delivered. Standard value date for most currencies is trade date + 2 business days, with some pairs such as USDCAD, USDRUB, USDTRY settling next business day. In order for a date to be a valid value date for an FX transaction, the central banks for both currencies must be open for settlements. If either currency has a holiday on the target value date, settlement is deferred until the next valid business day for both currencies. In addition, most currency transactions will not settle on a USD settlement holiday.

When holding positions overnight, the number of swap days charged or earned depends is the number of days between two value dates.

The table below displays value days for the next 2 weeks. Traders should familiarize themselves with the standards for FX settlement as this may have significant impact on positions.