Premium Flowers / Swap

This time we will learn about the SWAP is also often called the forex trading world as an Overnight interest or the interest premium. Here we will learn how to do calculations swap / the overnight interest rate. The purpose of the Central Bank interest rates are each like to IDR (Indonesian Rupiah) that we see is the interest rate provided by the Central Bank of the Republic of Indonesia, namely Bank Indonesia. As of this writing, the interest rate charged by Bank Indonesia for the currency IDR was 7.75% per annum. As for the USD (U.S. Dollar - the U.S.) interest rates we will consider is the interest rate established by the U.S. central bank, the Federal Reserve (commonly called the Fed) at 0.25% per annum.If you look closely, you can see an opportunity here! Do you think of?What if I borrow from banks in the U.S. amounted to USD 1 million with interest on the loan, eg 3% a year. Then I change USD into INR and I was deposited in a bank in Indonesia with deposit interest rate of 7.5%. I have a difference +4.5% / year. Interesting is not it? Stay lending only;). This technique is known as the Carry Trade a few years is quite widespread in practice. Simplified sekalikah this? In fact doing so is not that easy, risks and difficulties we will not discuss in this article but this became the basis for us to understand why Swap or Overnight Interest exists in forex trading.
Now, let's just pay attention to interest rates that are often traded currencies in forex trading, such as GBP (Great Britain Pound - UK) and USD, for example, we will trade the GBP / USD.If the GBP will strengthen against the USD in the long run, so we took the initiative to open Buy GBP / USD in the next 1-3 days floating position, for example, we are trading 1 lot just in Mini Accounts. Position Buy 1 lot GBP / USD is going to get a premium interest rate / interest rate swaps for the UK higher than American rates. .
For daily swap (premium rate) Buy GBPUSD position is as follows:

    * Given the interest rate per annum England (BoE) is 1.0% and,
    * U.S. interest rate per year (FED) is 0.25%.
A set interest rate is the central bank a respective countries, the Bank of England, the Bank of England and the U.S. central bank is the Federal Reserve. Remember interest rates listed are for a year.
Theoretical formula of premium interest / swap per day are as follows:


    * Position Buy for Pair A / B: ((A state interest - The interest rate the state B)% x Total Lot x Contract Size) / 365 days
    * Position Sell for Pair A / B: ((Interest rate country B - The interest rate country A)% x Total Lot x Contract Size) / 365 days
So for the opening of the Buy 1 lot GBP / USD is:
((A British interest rates - Interest rates American countries)% x 1 x 10,000) / 365= ((1 - 0:25)% x 1 x 10,000) / 365= 75 / 365= $ 0.2 per day for 1 lot.So for the position Buy GBP / USD for 1 lot will RECEIVE $ 0.2 per day, but on the contrary, if a position Sell GBP / USD for 1 lot then it will PAY for $ 0.2 per day.

Ausi interest rates: 3.25% and Japanese interest rate: 0.1%. Based on calculations, if you do buy 1 lot EUR / JPY will RECEIVE swap amounting to $ 0.86 per day. And indeed if such a position Sell more than one day will PAY swap amounting to $ 0.86.

Here is a table of theoretical swap for Mini Account with another 10,000 contracts as much as 1 lot per day for a Buy & Sell:

Pair / Currency Pairs	Buy Premium ($)	Sell Premium ($)
EUR/USD	0.48	-0.48
GBP/USD	0.2	-$0.2
AUD/USD	0.82	-0.82
NZD/USD	0.89	-0.89
USD/CHF	-0.07	0.07
USD/CAD	-0.2	0.2
USD/JPY	0.04	-0.04
NZD/JPY	0.93	-0.93
AUD/JPY	0.86	-0.86
EUR/JPY	0.52	-0.52
GBP/JPY	0.25	-0.25
EUR/GBP	0.27	-0.27
CAD/JPY	0.25	-0.25

Note: This table is for a mini account with 10,000 contract as much as 1 lot.

For the standard account (contract 100.000) stay multiplied by 10. Eg for the opening of 10 lots (standard account) AUD / USD then the swap is obtained is 10 x 0.82 = $ 8.2.

Source : Belajarforexs.com