FXTM introduces a swap rate free Over The Weekend account.
Swap rates are one of those things both generally ignored and misunderstood in the Forex world. But they affect every trader who leaves positions open overnight, and can become very material for traders who often do so. Without expanding too much on the topic, swap rates are a small charge either added or deducted to/from a client’s account, for holding an FX position open overnight. They occur because of the difference in interest rates between currencies.
Overnight swap rates should be very easy to calculate, and should in theory be the same across all FX brokerages — as the “base” interest rate in each currency is a known, fixed thing. But they are not. An interesting new feature in Myfxbook shows how swap rates differ greatly across FX brokers. What is happening in our view is that some brokers are taking advantage of traders, nickel-and-diming their clients by charging a seemingly-hidden fee for holding positions open overnight.
This brings us to Cyprus FX broker FXTM’s new promotion, its Over The Weekend account. FXTM’s promotion offers traders the opportunity to simply avoid all swap rate charges for positions held overnight during the trading week. (Positions held over the weekend will still be subject to a small weekend fee.) We think the FXTM promotion is a great idea, but we also believe that most traders won’t ‘get it’, and as such we wonder just how successful this promotion will be. But we do commend FXTM for bringing this topic to the attention of traders, who should indeed care what they are being charged for holding positions open overnight.
This article is the latest in a LeapRate series on interesting and innovative FX promotions. Other promotions we’ve recently covered include:
- Miss Dukascopy $250,000 contest
- IronFX free Vegas trip contest
- Liquid Markets earn-bonus-interest promotion
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