Financing your FX with ForexGen

Financing your FX positions held overnight (known as interest rollover or ‘TomNext’) Trading strategies involve the use of interest rate differentials between the currencies in a pair and those positions that are rolled over from one trading day to the next will incur financing based upon these interest rate differentials. You pay interest on the currency that you sell and receive interest on the currency that you buy.

The interest rate applied is ‘TomNext’ which is an abbreviation for ‘Tomorrow’ or the ‘Next’ business day because the first value date is tomorrow or the next business day. The TomNext price reflects the applicable interest rate between Tomorrow/Next and the ‘Spot value’ date. At (22:00) 10:00pm London Time (Standard FX market Value-Date change time) each day, ForexGen settles all spot positions by closing the trade at the current market rate and re-opening it for the following day’s spot date at a rate that will reflect the interest rate differential.

Example:You are long the GBP/USD pair.You will receive interest on the GBP and pay interest on the USD.If GBP has a higher interest rate than the USD, you will receive a net interest payment but if GBP has a lower interest than the USD, you will pay out a net interest payment.