A question about swap

If I open a position and I maintain it over more than one night, will the swap rate for that position be fixed or does it change if the rate changes in the following days?

Hello @Alien,

Swap is a compound value - it is calculated as a percentage of the price of the underlying instrument, which is dependant on variables such as the interbank interest rates (as you mentioned) as well as other conditions, concerning the market in question. You can see the cost of holding a position overnight in the instrument details.

Thank you @PeterA

Sorry to ask for more clarification, some instruments change swap rate significantly from one day to the other (e.g Tesla, Nikiola,…), do I pay a different rate each night or do I pay the rate that was effective when I opened the position?

The reason is the price of those stocks fluctuates a lot, which results in a different swap - if the price of the stock increases, so will the overnight swap that you will pay that night, if it decreases, swap will decrease as well. It is bound to the current market price, not related to your opening price. :v:

1 Like