Trading Conditions

LEXAFX SWAP AND SPREAD RATE-S

The swap and spread ratios applied when investing with Lexafx are indicated in the table at the bottom of the page below.

For investors who are new to trading, we have briefly summarized what these expressions mean.

Swap

Swap Fees are the cost of a trade that is applied to transactions that are open at the end of the day, resulting from the difference between the interest rates of the countries to which the currency pair is traded. “Forex” money is lent money in Forex markets and “Sold” money is borrowed. According to this logic, you can see the swap income or cost as follows, in the simplest way;

Swap positions

If the interest rate of the received money is low and the interest rate of the money being sold is high (+), the cost is deducted from the investor’s account.

If the interest rate of the sold money is low and the interest rate of the money received is high, (+), it is returned to the investor as income.

It would be better if we explained this with an example applied to Lexafx.

Currency Rate Short swap (%) Long Swap (percentage) Trading Hours

EURUSD 1.67 -7.93 Mon 00:00 – Fri 23:00

Rules Relating to Swap Fees

• Swap costs or revenues are not applied to positions closed on the same day. Swap rates apply to positions that are still open at the end of the day.
• Change swap balances because of the interest rates of the countries to which the relevant currency units belong.
• A 3-day swap is applied to positions that are not yet closed on Thursdays (equivalent to the value of the weekend) because the Forex market is valued at +2 days. On other days, this practice is 1 day.
• You can choose the Islamic Account option as a non-swap-based application.

Spread

The difference between the buying and selling prices of financial assets is called “Spread” and expressed in “pip” unit.

For example, if the buying price is 1.1225 and the selling price is 1.1223 in the EURUSD parity, this spread is 2 pips for Spread (1,1225-1,1223 = 0,002). Therefore, when you open a lot (i.e. 100 thousand units) in one lot, you will end up with a cost of 0,0002 * 100,000 = 20 USD Spread.

It is only the cost of opening this position. If the parity reaches 1,1227, your cost will be zero. The spread, which is an important cost for the investor, can be fixed or variable. Variable spreads are low when markets are liquid, but they can be high when liquidity is scarce. Fixed spreads are fixed values offered to investors by brokerage houses.

O/N Overnight – Overnight spreads can vary according to market conditions. Overnight hours means from 23:00 until 08:00 GMT +3.