overnight charge

peterwood · Jun 28, 2007

Hi All,
I am a new member and guess what!,i have a question.I spreadbet on the forex market,namely the cash usd/jy.I use CMC to do this.I had an overnight bet the other day at 40pounds a point with a 3point spread to trade.I closed out next day with a loss of 80pounds or so i thought.I then found out i had been charged another 76 pounds to carry the position overnight.I am somewhat miffed.What i would like to know is are there any other spreadbetters here and if so what do they think of these charges!,
Regards,
Peter

jacinto · Jun 28, 2007

hi,

i would suggest going through your broker's website, they typically give an arithmetic example of that type of charge. Once doing this, run your numbers, and you will know if it was fair or not.

j

oiltanker · Jun 28, 2007

overnight usually has a charge.
on some [depending what and which way] they pay you.
try the demos

the spreadbetting thread would be the place to go?

peterwood · Jun 28, 2007

Hi All,
Thanks for the replies.Shortly after i posted i received a phone call from CMC explaining the charge.It's to do with the "carry" trade and if my bet had been a buy i would have made the same amount.Still does no harm to rattle a few cages now and again,
Peter

the blades · Jun 28, 2007

peterwood said:
Hi All,
I am a new member and guess what!,i have a question.I spreadbet on the forex market,namely the cash usd/jy.I use CMC to do this.I had an overnight bet the other day at 40pounds a point with a 3point spread to trade.I closed out next day with a loss of 80pounds or so i thought.I then found out i had been charged another 76 pounds to carry the position overnight.I am somewhat miffed.What i would like to know is are there any other spreadbetters here and if so what do they think of these charges!,
Regards,
Peter

Peter,

The interest you pay will be the difference between the interest rate of the currency you buy and the currency you sell (each adjusted in their favour by abour 0.5%). If you think that at £40 per pip, and (for eg) 20,000 pips (for cable) you're trading some cash there. At a few percentage pts differential, the charges seem about right.

You might call the various compaines to see how the adjust the interest rates (do they add 0.5% or 0.25% etc) and find you'll get a better deal elsewhere. But probably not a lot.

Cheers,
UTB

Hoggums · Jun 28, 2007

peterwood said:
Hi All,
I am a new member and guess what!,i have a question.I spreadbet on the forex market,namely the cash usd/jy.I use CMC to do this.I had an overnight bet the other day at 40pounds a point with a 3point spread to trade.I closed out next day with a loss of 80pounds or so i thought.I then found out i had been charged another 76 pounds to carry the position overnight.I am somewhat miffed.What i would like to know is are there any other spreadbetters here and if so what do they think of these charges!,
Regards,
Peter

I'm shocked someone trading £40pp and leaving those positions overnight is unaware of the basics...

tightstops · Jun 28, 2007

i prefer to look at the charge in terms of pips, so in this case the charge for holding was 2 pips. its worth bearing in mind when trading the yen that since the interest rate is only .5% it does become noticeable especially if you intend to hold for a while.

tightstops · Jun 28, 2007

Hoggums said:
I'm shocked someone trading £40pp and leaving those positions overnight is unaware of the basics...

good point and im guessing hes pretty glad he didnt have that trade on last night

Hoggums · Jun 28, 2007

tightstops said:
i prefer to look at the charge in terms of pips, so in this case the charge for holding was 2 pips. its worth bearing in mind when trading the yen that since the interest rate is only .5% it does become noticeable especially if you intend to hold for a while.

Yes particularly as many SBs add or subtract 2% onto the interest depending what side of the carry you're on.

So if the interest rate diff is 5% and you are on the side of the carry - then you'll receive 3% interest - but if you are the other side then you'll pay 7% interest.

Please see..
http://www.trade2win.com/boards/showpost.php?p=335107&postcount=3151

the blades · Jun 28, 2007

Hoggums said:
Yes particularly as many SBs add or subtract 2% onto the interest depending what side of the carry you're on.

So if the interest rate diff is 5% and you are on the side of the carry - then you'll receive 3% interest - but if you are the other side then you'll pay 7% interest.

Please see..
http://www.trade2win.com/boards/showpost.php?p=335107&postcount=3151

so it seems my "0.5%" was very understated, even if the principle was correct!

Thanks for the clarification.

UTB

PS - the size of the bet in conjuntion with the question being asked was a shock to me, too

peterwood · Jun 28, 2007

Thanks for the additional posts.I did go back in last night but in the other direction but only for 2 pounds a point and at least made some of the loss back,

overnight charge

peterwood

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jacinto

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oiltanker

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peterwood

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the blades

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Hoggums

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tightstops

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the blades

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