Financing Costs

cube101

Junior member
25 0
Hi All,
A question, if some can help me?

I have been trading a profitable system now for approx. 2-3 years however I am constantly seeing a good chunk of profit disappearing to the cost of ‘roll-over’, financing, interest (whatever you want to call it) It’s averaging around £3500 – 4000 per year.
I’ll give a broad overview.

Trading account £25,000 (i'm guessing those with large accounts can get better rates?)
Average number of trades per year approx. 200
Average time holding a position is 2-3days (some trades will be over in hours, others can drag on 5+ days – no way of knowing in advance which will do what)
The rough average financing per trade is about £18-20

So my question, is there any way to reduce this cost of business? Who seems to offer the cheapest financing?
Finally, I’m surprised this isn’t discussed more often as it’s a big cost when you start scaling up.

Thanks in advance
 

cube101

Junior member
25 0
yes currently, although have also used a retail forex company and financing cast was pretty similar tbh.
 

Martinghoul

Senior member
2,690 276
If you're getting charged too much, you should be able to reduce it by switching to a "fairer" provider. If you're getting charged the market rate, then you have to live with it, as it's the cost of doing business.
 

scose-no-doubt

Veteren member
4,630 954
The usually do libor + 3% I think.
 

cube101

Junior member
25 0
Yeah I guessed that might be the responce :-( you can but try.
Just wanted to see what others do in this respect.

who would you concider the fairest of fair providers?
 

Martinghoul

Senior member
2,690 276
Yeah I guessed that might be the responce :-( you can but try.
Just wanted to see what others do in this respect.

who would you concider the fairest of fair providers?
I am a big fan of GFT... They do the rolls using straight IBOR rates for the two ccies. That's better than what IG does, for instance, where they would actually do the roll trade (out of spot position and into T/N) at half the regular bid/offer (or at least that's my recollection). It's nice of them to waive half of the bid/offer, but I don't see why I should be charged anything at all. That's why I always trade fwds, when I do longer-term trades in IG, even though the bid/offer is wider.
 

cube101

Junior member
25 0
cheers guys, ill check out GFT.
Anyone rate Oanda UK?

If i knew I was holding a position over a week in advance i'd go with a forward contract but the speads are so much tighter on spot so it works out better most of the time to pay the finance than pay the wider spread.
 

scose-no-doubt

Veteren member
4,630 954
Well seeing how you've had your answer, may I detract a little?

Mr Ghoul, what are your musings on the recent libor lulz and did you have an inkling there was something fishy going on during? As an industry insider do you think that this inquest going to spur any real changes?
 

Martinghoul

Senior member
2,690 276
Well seeing how you've had your answer, may I detract a little?

Mr Ghoul, what are your musings on the recent libor lulz and did you have an inkling there was something fishy going on during? As an industry insider do you think that this inquest going to spur any real changes?
Oh god, there is soooooo much written on the subject, I hesitate to add anything to the noise. As a market participant, I have some thoughts on all these LIBOR shenanigans that are based on (occasionally painful) personal experience (no, I don't mean prison, as I have never been that close to the action).

One outcome that is pretty certain to me is that it's going to be an almighty lawsuit with a potentially massive settlement that the banks are likely going to have to agree to. At any rate, I would be happy to give you more detailed thoughts, but maybe this ain't the right thread for it.
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock