Indicates Positive Swap
Indicates Negative Swap
The heat map shows the distribution of both buy and sell swap points when you hold these FX CFD positions overnight at the heat map. Swap points are calculated based on the difference in interest rates between the Forex pair you are trading. As every FX CFD trade involves selling one underlying currency and buying another, interest charges will be incurred. Interest may be gained or lost when you hold the FX CFD position overnight.
Blue indicates a positive value. The higher the colour intensity, the greater the value and the more interest you will receive when you hold your FX CFD position overnight. It happens when the interest rate on the currency you are buying is higher than the interest rate on the currency you are selling.
Red indicates a negative value. The higher the colour intensity, the greater the value and the more interest you will pay when you hold your FX CFD position overnight. It happens when the interest rate on the currency you are buying is lower than the interest rate on the currency you are selling.
As long as you have an existing open position held overnight, interest adjustments will be applicable on a daily basis. This will be credited/debited into your CFD account in the form of an interest adjustment. All interest adjustments will be reflected in your daily statements.
For every forex trade, you are essentially selling a currency to buy the other currency. You receive interest daily on the currency you purchased, while paying interest for the currency you sell. This interest rate differential is defined as “Swap Points”. Strategies which seek to exploit this interest rate differential are known as “Carry Trades”.
Mike decides to enter into a Short Position for EUR/USD. When one enters into a short position for EUR/USD, one is Selling Euro and Buying USD.
Vice Versa, a Long Position for EUR/USD is defined as taking a Buy Position for Euro and a sell position for USD.
As the interest rates for the Euro is lower than that the USD, one will be able to yield an interest rate differential from the Swap Points by holding on to the trade overnight assuming that there are no major fluctuations between the 2 interest rates of the given Forex pair.
By holding the FX CFD pair denoted “Blue” from the FX heat map will allow you to earn daily interest as long as the given FX CFD pair is held overnight in the correct buy/sell direction.
Traders need to be aware of the Exchange Rate Fluctuations for the currency pairs they are holding.
Examples shown are for illustrative purposes and may not reflect the current interest rate of the respective currencies.
* For more information on the FX CFD trading hours, kindly refer to our FX CFD Product page.
1) Swap points on the heat map are subjected to changes on a daily basis.
Fluctuations in interest rates of the respective Forex pairs may cause the interest rate differential of the respective Forex pair to turn from positive to negative, and vice versa. This will be denoted by the colours changes in the FX swap heat map.
2) Higher values on interest adjustment may be expected if the value date of the underlying forex pair crosses over a weekend or holiday.
3) Past History may not be indicative of future results.
4) Although CFDs can magnify your gains through leverage, losses are also magnified and you could lose more than the original investment committed when the exchange rate for the underlying Forex pair moves against your position.
The key is always to use leverage responsibly and to have a trading exit strategy in place.
The information/materials provided, where they are not ERA, are provided for general information/circulation only and not intended and therefore should not be taken as any offer or solicitation to do any investment or trade. No assessment has been made by PSPL as to the suitability for you of any materials in this website. As always, the decision to trade and/or invest remains solely with you. Information/materials in this website are provided “as is” without warranty of any kind, either express or implied. Such information/materials provided have been procured from sources believed to be reliable and accurate (but whose reliability and accuracy cannot be and are not warranted); and may have been acted on by PSPL or members of the PhillipCapital group before being made available to you. All investments are subject to investment risks. Ideally you should and you may wish to seek advice from a financial adviser before making a commitment to purchase or invest in the investment product(s) mentioned in this website. If you choose not to do so, you are then choosing to make your own decision on whether any of the said investment product(s) are suitable for you. Neither PSPL nor any fellow member of the PhillipCapital group of entities shall, in any event, be liable to you for any direct/indirect or any other damages of any kind arising from or in connection with your reliance on any information in and/or materials attached to this website.
You may wish to consult your trading representative first before making a commitment to purchase any of the investment products mentioned herein.
Updated: 23rd July 2021 5.30 PM
|Updated: 24th July 2020, 5.30 PM
Source: CNN Money