What prices are displayed on the charts in my trading terminal? At what price will my order be triggered?

Bars on MetaTrader 4 charts are generated based on the "Bid" price. If you look at an MT4 chart, the High (the top of the bar) is the maximum Bid price and the Low (the bottom of the bar) is the minimum Bid price over a period of time.

Those of you who have read our "Forex Basics" section should know that the Ask price is the Bid price plus the spread (in other words the spread is the difference between the bid price and the ask price). From this, we can conclude that the minimum Ask price equals the Low plus the spread, and the maximum Ask equals the High + the spread.

Stop Loss and Take Profit orders on Buy positions are triggered when the Bid price (in the stream of quotes) reaches the order level.

Stop Loss and Take Profit orders on Sell positions are triggered when the Ask price reaches the order level.

Buy Limit and Buy Stop orders on a position are triggered when the Ask price reaches the order level.

Sell Limit and Sell Stop orders on a position are triggered when the Bid price reaches the order level.

For Example:

Say you open a Sell position on EURUSD at 1.2250, placing a Stop Loss at 1.2340 and a Take Profit at 1.2190. The spread on EURUSD is 2 pips.

Referring to the table above, you can see that a Stop Loss on a Sell order will be triggered when the Ask price reaches the order level (since a short position is effectively closed by a Buy order and you buy at the Ask price). The Stop Loss on your Sell order will be triggered when the Ask reaches 1.2340 or higher. Keep in mind that the price in your MT4 chart is the Bid price. So the order will only be triggered when the "High" in MetaTrader is 1.2338 (1.2340 minus the 2-pip spread) or higher.

Like Stop Loss orders, Take Profit orders on Sell positions are also triggered when the Ask price reaches the order level. The Take Profit on the position above will be triggered when the Ask price reaches 1.2190 or lower. This means that the order will be triggered when the Bid price is 1.2188 (1.2190 minus the 2-pip spread) or lower. Since the Low price in MT4 is based on the Bid price, we can conclude that the order will only be triggered when the "Low" in MetaTrader reaches 1.2188.

What happens when there is a non-market spike?

A "spike" is a quote that substantially deviates from the market price. It may look like this:

A "spike" has the following characteristics:

• a) A significant price gap
• b) A quick price rebound
• c) There wasn't any rapid price movement before it appeared
• d) There wasn't any important macroeconomic/financial news that caused the spike

Please note, that our definition of "spike" differs from the traditional definition of the word, a rapid change in price.

There are two primary reasons for non-market spikes:

• 1. Technical failure
• 2. A single transaction made at a non-market price makes it into the information system by mistake

The second scenario may occur, for example, if an instrument is sold at a price significantly lower than the market price. After a Trader jumps on the price and places a Buy order, the price will no longer be available for other traders, but will be recorded in the information system.

By rule, transactions can not be made at non-market spikes. If a trader does manage to make a transaction at a spike on their live account, the trade will be voided and the spike will be deleted from the quote archive. However, if the order was placed on a demo account, it will not be deleted.

What is a price gap?

A "Price Gap" describes either of the following situations:

• 1. The Bid of the current quote is more than the Ask of the previous quote
• 2. The Ask of the current quote is less than the Bid of the previous quote

Read through our Regulatory Documents to find out more about how orders on different account types are processed when they fall into a price gap:

• For micro.mt4, classic.mt4, classic.systematic, micro.mt4.swapfree, classic.mt4.swapfree, classic.systematic.swapfree, pamm.mt4, pamm.systematic and classic.zulutrade accounts, see clauses 5.28, 5.29, 5.30, 5.31 and 5.32 in our Terms of Business.
• For classic.ndd.mt4 and pamm.ndd.mt4 accounts, see clause 5.24 b) in our NDD.MT4 Terms of Business.
• For pro.ecn.mt4 and pamm.ecn.mt4 accounts, see clause 5.24 b) in our ECN.MT4 Terms of Business.

On pro.direct Accounts, when the order level of a pending order falls into a price gap, the floating profits/losses of all open and new positions will be calculated based on the quote at the moment the order was placed in the order queue to be processed.

Price gaps can be one of two types:

• Read Close 1

  The price gap is visible in the M1 (1-minute) timeframe.

  

  For Example:

  A "Buy Stop" order is placed at 1.4305, as shown in the picture.

  The last quote before the gap is 1.4300. The quote following the gap is 1.4331.

  Here, the "Buy Stop" order, placed at 1.4305 falls into the price gap.

• Read Close 2

  The price gap is not visible in the M1 (1-minute) timeframe.

  

  For Example:

  A "Sell Stop" order is placed at 1.3625, as shown in the piture.

  The last quote before the gap is 1.3628. The quote following the gap is 1.3606.

  A white candle is shown in the chart. The price gap is enclosed inside the candle, in other words, not visible.

  The price gap can only be seen in the "Tick History" section in myAlpari, an archive of client quotes.

Why did my broker close my position without my consent?

The Dealer reserves the right to forcibly close all or part of a trader's loss-making positions at the current market price in certain conditions. Read through our Regulatory Documents to find out more:

• For micro.mt4, classic.mt4, classic.systematic, micro.mt4.swapfree, classic.mt4.swapfree, classic.systematic.swapfree, pamm.mt4 and pamm.systematic accounts, see clause 6 in our Terms of Business.
• For classic.ndd.mt4 and pamm.ndd.mt4 accounts, see clause 6 in our NDD.MT4 Terms of Business.
• For pro.ecn.mt4 and pamm.ecn.mt4 accounts, see clause 6 in our ECN.MT4 Terms of Business.
• For pro.direct accounts, see clause 7 in our Terms of Business for Alpari Direct.

The dealer may close a position based on the Equity level:

• On micro.mt4, classic.mt4, classic.systematic, micro.mt4.swapfree, classic.mt4.swapfree, classic.systematic.swapfree, pamm.mt4, and pamm.systematic accounts: when the Equity level is less than 20% of the Margin
• On classic.ndd.mt4, pamm.ndd.mt4, pro.ecn.mt4, pamm.ecn.mt4 and pro.direct accounts: when the Equity level is less than 60% of the Margin

The ratio of Equity to Margin is also called the Margin Level and is expressed as a percentage:

Margin Level = Equity / Margin X 100%

If you have several open positions on your account, the position with the highest level of Floating Losses will be the first to be placed in the queue to be closed.

Example 1:

Let's take a look at this trading account as an example:

Here, the Equity is 4,494.30 USD and the Margin is 345.48 USD.

The Margin Level is 1,300.90% (4,494.30 / 345.48 X 100% = 1,300.90%).

When the Equity level drops below 69.1 USD (with Floating Losses), the Margin Level will drop below 20% (69.1 / 345.48 X 100% = 19.9%). At this point, the Dealer will have the right to close this position.

Example 2:

We'll take a look at a second trading account:

There are two open positions on the account:

BUY 3.0 Lots GBPUSD at 1.62181

BUY 7.0 Lots GBPUSD at 1.62300

Here, the Margin is 3,243.69 USD (Calculate Margin).

If the Floating Losses on the account rise to more than 16,283 USD, the Equity will drop below 648.738 USD, or 20% of the Margin (3,243.69 X 20% = 648.738). At this point, the Dealer will have the right to close the trader's open positions. The order for 7.0 lots will be closed first, since it has the highest level of Floating Losses.

Please Note: If you have an alpari.classic or an alpari.systematic account, you can set a custom Stop Out level on your account. In myAlpari, simply select the trading account where you would like to set a Stop Out level and enter the level of Equity on the account where you would like the Dealer to close all of your open positions. By setting a Stop Out on your trading account, you can have your account closed by the Dealer before your Margin Level falls to 20%.

When I try to open a position, I get the message, "Not enough money." How do I calculate the amount needed to open a position?

Please Note: The Trader's Calculator makes calculating margin requirements easy. Simply enter in the information about the position you wish to open and press "Calculate." If you wish to calculate the Margin yourself, click the "Calculation Formulas" tab on the "Trader's Calculator" page to find the formulas used to calculate the Necessary Margin for positions on currency pairs (Forex) and spot metals.

On micro.mt4 and micro.mt4.swapfree accounts, the leverage is 1:500.

On classic.mt4, classic.mt4.swapfree, classic.systematic, classic.systematic.swapfree and classic.zulutrade accounts, the leverage is 1:500 by default, but can be changed.

On pamm.mt4, pamm.systematic, classic.ndd.mt4, pamm.ndd.mt4, pro.ecn.mt4 and pamm.ecn.mt4 accounts, the leverage is 1:100.

Use this formula to calculate the amount needed to open a position (in the base currency):

Margin = Contract / Leverage

• Margin: the amount required to open the position (the collateral)
• Contract: the size of the contract, in the base currency (1 lot = 100,000 units of the base currency, 0.1 lots = 10,000 units of the base currency, etc.)
• Base Currency: the first currency listed in the currency pair (for USDJPY: USD, for EURUSD: EUR)
• Leverage: the leverage applied to the position (for 1:500, use 500; for 1:100, use 100, etc.)

After calculating the margin in the base currency, you will need to convert this amount into the deposit currency using the exchange rate at the time the position is opened.

• Read Close 1

  Calculating the Margin on a pamm.mt4 Account

  
  

  Let's take a look at an example to find out how to to calculate the necessary margin on a pamm.mt4 account:
  
  Trading Instrument: EURUSD
  Base Currency: EUR
  Contract Size: 0.1 lots (10,000 EUR)
  Leverage: 1:100 (use 100 in the formula)
  Rate (EURUSD): 1.3540
  Deposit Currency: USD

  Calculation:

  • 1. 10,000 EUR / 100 = 100 EUR (Margin = Contract / Leverage)
  • 2. After calculating the margin in the base currency, we need to convert this amount into the deposit currency (USD):
    
    Margin = 100 EUR X 1.3540 = 135.40 USD.
    
    135.40 USD is required to open this position.
• Read Close 2

  Calculating the Margin on a micro.mt4 Account

  Let's look at another example to find out how to calculate the necessary margin on a micro.mt4 account:
  
  Trading Instrument: CADCHF
  Base Currency: CAD
  Contract Size: 0.01 lots (1,000 CAD)
  Leverage: 1:500 (500)
  Rate (USDCAD): 1.0580
  Deposit Currency: USD

  Calculation:

  • 1. 1,000 CAD / 500 = 2 CAD (Margin = Contract / Leverage)
  • 2. After calculating the margin in the base currency, we need to convert this amount into the deposit currency (USD):
    Margin = 2 CAD / 1.0580 = 1.89 USD
    
    1.89 USD is required to open this position
 

• Read Close 3

  Calculating the Margin on spot metals

  Finally, we'll look at how to calculate the margin for a position on XAUUSD (spot gold):

  Trading Instrument: XAUUSD
  Lots: 0.1
  Contract: 10 troy oz (100 troy oz X 0.1 lots)
  Margin (%): 1:100 (1%)
  Price: 1,381.50
  Deposit Currency: USD
  
  

  Calculation:

  Margin = (Contract X Рrice) / Leverage = (10 X 1381.50) / 100 = 138.15 USD

  138.15 USD is needed to open this position.

Calculating Margin Requirements (Margin) with Floating Leverage

Floating leverage is used on all Alpari account types with the exception of alpari.direct.

With floating leverage, the amount of leverage applied to a client's open positions is based on the total "notional value" of a client's open open positions on the account.

Notional value is the size of the position held when using leverage. For example, if you open a position for 1 lot of EURUSD, with 1:100 leverage, the notional value of this position will be 100,000 EUR (1 X 100,000). The notional value should not be confused with the necessary margin (the cost of holding the position), which in this example is 1,000 EUR (100,000 / 100).

Here is how floating leverage works on Alpari accounts:

1. If the total notional value of all open positions on a client's account is less than or equal to 3,000,000 USD, the required margin will be calculated using 1:500 leverage (1:100 for alpari.pamm accounts).

2. If the total notional value of all open positions on a client's account is more than 3,000,000 USD, but less than or equal to 5,000,000 USD, then the required margin for the first 3,000,000 USD in volume will be calculated using 1:500 leverage. For the remaining volume, the required margin will be calculated using 1:200 leverage.

3. If the total notional value of all open positions on a client's account is more than 5,000,000 USD, but less than or equal to 10,000,000 USD, then the required margin for the first 3,000,000 USD in volume will be calculated using 1:500 leverage, the required margin for the volume more than 3,000,000 USD and less than or equal to 5,000,000 USD will be calculated using 1:200 leverage and the required margin for the remaining volume will be calculated using 1:100 leverage.

4. If the total notional value of all open positions on a client's account is more than 10,000,000 USD, the required margin for the first 3,000,000 will be calculated using 1:500 leverage, the required margin for the volume more than 3,000,000 USD and less than or equal to 5,000,000 USD will be calculated using 1:200 leverage, the required margin for the volume more than 5,000,000 USD and less than or equal to 10,000,000 USD will be calculated using 1:100 leverage and the required margin for the remaining volume will be calculated using 1:33 leverage.

Example: The table below shows how the required margin will be calculated on an account where the total notional volume of open positions is 12,000,000 USD.

• Read Close 1

  Example 1

  A position is opened for 40 lots of GBPUSD at 1.4600. Another position is opened for 50 lots of EURUSD at 1.3300. The notional volume for the position on GBPUSD is 5,840,000 USD (40 X 100,000 X 1.4600 = 5,840,000). For the 50 lots of EURUSD, the notional value is 6,650,000 USD (50 X 100,000 X 1.3300 = 6,650,000). The total notional value on the trading account is 12,490,000 USD.

  Here is how the margin is calculated:

  The total notional value on the account (12,490,000 USD) is more than 10,000,000 USD. 1:500 leverage will be used to calculate the margin required for the first 3,000,000 USD in volume, 1:200 for the next 2,000,000 USD, 1:100 for the next 5,000,000 USD and 1:33 for the remaining volume on the account.

  Calculation:

  3,000,000 / 500 + 2,000,000 / 200 + 5,000,000 / 100 + 2,490,000 / 33 = 141,454.54 USD.

  Notional Value Range (in USD)	Leverage Provided	Margin
  0 - 3,000,000 USD	1:500	6,000 USD
  3,000,000 - 5,000,000 USD	1:200	10,000 USD
  5,000,000 - 10,000,000 USD	1:100	50,000 USD
  Greater than 10,000,000 USD	1:33	75,454.54 USD
  Total		141,454.54 USD

• Read Close 2

  Example 2

  A position is opened for 30 lots of USDJPY at 91.10. Another position is opened for 20 lots of GBPUSD at 1.4500. For the 30 lots of USDJPY, the notional value is 3,000,000 USD (30 X 100,000 = 3,000,000). For the 20 lots of GBPUSD, the notional value is 2,900,000 USD (20 X 100,000 X 1.4500 = 2,900,000 USD). The total notional value for the two positions is 5,900,000 USD.

  Here is how the margin is calculated:

  The total notional value is 5,900,000 USD, which is more than 5,000,000 USD, but less than 10,000,000 USD. 1:500 leverage will be used to calculate the margin for the first 3,000,000 USD of volume, 1:200 for the next 2,000,000 USD and 1:100 for the remaining volume.

  Calculation:

  3,000,000 / 500 + 2,000,000 / 200 + 900,000 / 100 = 25,000 USD.

  Notional Value Range (in USD)	Leverage Provided	Margin
  0 - 3,000,000 USD	1:500	6,000 USD
  3,000,000 - 5,000,000 USD	1:200	10,000 USD
  5,000,000 - 10,000,000 USD	1:100	9,000 USD
  Greater than 10,000 000 USD	1:33	0 USD
  Total:		25,000 USD

Important: On alpari.micro and alpari.classic accounts, if positions are opened, closed or modified on currency pairs (Forex) during the final hour before the close of the trading session on Friday, 1:100 leverage will be temporarily applied to all opened and re-opened positions. Before the open of the next trading session, the leverage will be reset based on your total volume of open positions.

The table below shows how floating leverage is calculated for accounts denominated in EUR:

You can find out more about calculating margin requirements with floating leverage in the Margin Requirements section of our site.

Calculating Margin Requirements for Locked Positions

To say that a position on an instrument is "locked" means that you have multiple positions open on this instrument, including a short position and a long position. For example, if you open a Buy position on EURUSD for 1.0 lots and then open a Sell position on EURUSD for 1.0 lots, you can say that your positions are locked, since you have both a long and a short position on EURUSD. If you open another Buy position on EURUSD for 0.5 lots, you will have 2.5 lots of total volume on EURUSD, 2.0 of which is "locked," 0.5 of which is "unlocked."

For currency pairs, the margin required for locked positions is calculated in the USD equivalent of the base currency, not as a fixed amount in USD. When you have multiple positions on your account, and all or a fraction of your volume is locked:

1. Calculate the weighted average price (AvgPr) of your open positions.

AvgPr = (open_price1 X Lot1 + open_price2 X Lot2 + ... + open_priceX X Lotx) / (Lot1 + Lot2 + ... + Lotx)

• open_price1: price of the first position when opened
• open_price2: price of the second position when opened
• open_priceX: price of position "X" when opened
• Lotx: volume of position "X" (in lots)

2. Calculate the margin for the "locked" volume.

M1 = AvgPr X lots X hedged_margin

• AvgPr: the weighted average price (calculated above in the first section)
• Lots: the total locked volume of open positions (in lots)
• hedged_margin: this value can be found as "Hedged Margin" in our Contract Specifications

3. Calculate the margin for the remaining ("unlocked") volume.

M2 = AvgPr X lots X margin

• AvgPr: the weighted average price (calculated above in the first section)
• Lots: the total unlocked volume of open positions (in lots)
• margin: this value can be found as "Margin" in our Contract Specifications

4. Calculate the total margin.

Margin = (M1 + M2)

• ReadClose 1

  Calculating the Margin on Locked Forex Positions

  Three positions are opened:

  • Buy 1.00 lots EURUSD at 1.48354
  • Buy 1.50 lots EURUSD at 1.48349
  • Sell 0.80 lots EURUSD at 1.48319

  1. Calculate the average weighted price:

  AvgPr = (1.00 X 1.48354 + 1.50 X 1.48349 + 0.80 X 1.48319) / (1.00 + 1.50 + 0.80) = 1.4834324

  2. Calculate the margin for the "locked" volume. The locked volume is 1.6 lots (0.8 X 2 = 1.6). The "hedged_margin" (found in our Contract Specifications) for EURUSD is 100 EUR.

  M1 = 1.4834324 X 1.60 X 100 = 237.349184

  3. Calculate the margin for the remaining ("unlocked") volume. There are 1.7 lots of unlocked volume (3.3 - 1.6 = 1.7). The "margin" (found in our Contract Specifications) for EURUSD is 200 EUR.

  M2 = 1.4834324 X 1.70 X 200 = 504.367016

  4. Calculate the total margin.

  Margin = 237.349184 + 504.367016 = 741.7162

Can I trade with less than 1:100 leverage?

The maximum leverage your broker can offer is 1:500. You always have the option to decrease your leverage in the "Leverage" section of myAlpari. However, before you start trading with less leverage, let's take a look at what happens when you trade with less leverage. Is it worth it?

Let's say you have a deposit of 10,000 USD. You open a position for 1 lot of EURUSD, with 1:100 leverage. Here, the necessary margin will be 1,000 USD, or 10% of your deposit. A Stop Out will be triggered when you have 9,800 USD in losses. For your position on EURUSD, that's more than 980 pips.

Let's say you make the same trade (1 lot of EURUSD) with 1:33 leverage. Here, the necessary margin will be $3,000, or 33% of your deposit. A Stop Out will be triggered when you have 9,400 USD in losses. For your position on EURUSD, that's more than 940 pips.

A Stop Out is a forced closing of the positions on your account when your Equity (Balance + Profit on Open Positions - Losses on Open Positions) falls to:

• below 20% of the necessary margin for micro.mt4, micro.mt4.swapfree, classic.mt4, classic.mt4.swapfree, classic.systematic, classic.systematic.swapfree, classic.zulutrade, pamm.mt4 and pamm.systematic accounts
• below 60% of the necessary margin for classic.ndd.mt4, classic.ndd.zulutrade, pamm.ndd.mt4, pamm.ecn.mt4, pro.ecn.mt4 and pro.direct accounts (During the final hour of the trading session on Fridays, the Stop Out level changes from 60% to 100%. The level will return to the previous level after the close of the session.)

When you trade with lower leverage, you will have tougher margin requirements. You might think to yourself that trading with less leverage will lower your exposure to risk. You are right, but there are also other ways to protect your deposit when trading, including changing your Stop Out level in myAlpari and placing Stop Loss orders.

Attention: On demo.classic.mt4 demo accounts and on classic.mt4, classic.systematic, classic.mt4.swapfree, classic.systematic.swapfree and classic.zulutrade live accounts, you are only allowed to change the leverage if there aren't any open positions on your account.

Please Note: You can change your leverage in myAlpari in the "Leverage" section.

How can I calculate the value of a pip? How do I calculate my profits/losses for Forex and spot metals?

To easily calculate the value of one pip, we recommend using the Trader's Calculator.

The word "pip" is actually short for "percentage in point." The pip is the smallest value the price of a currency pair can change. Most of the world's major currency pairs are quoted to the fourth decimal place, so a pip is generally .0001, or one hundredth of one percent of the "base" currency. Although currencies are generally quoted to the fourth decimal place, in MetaTrader 4, they are shown to the fifth decimal place (.00001).

The major exception is the Japanese yen (JPY). When a currency is quoted against the yen, a pip is equal to .01, or one hundredth of the "base" currency. This is because the value of 1 yen tends to hover around .01 USD, significantly less than the other major currencies (USD, EUR, GBP, CHF, etc.). In MetaTrader 4, these currency pairs are shown to the third decimal place (.001).

Each currency pair is expressed as a base currency quoted against a quote currency. The base currency is always listed first in the pairing; the quote currency second. Let's take EURUSD, for example. Here the base currency is EUR and the quote currency is USD.

Now let's take a look at the formula to calculate the value of one pip in the quote currency:

OnePipValue = ( Contract X (Price + OnePip) ) - (Contract X Price)

• OnePipValue: the value of one pip in the quote currency
• Contract: the contract size (in the base currency)
• Price: the price of the currency pair
• OnePip: .0001 for most major currency pairs (i.e. EURUSD), .01 for currency pairs with JPY (i.e. USDJPY)

• Read Close 1

  Example 1: Calculating the Value of One Pip of GBPCHF on a Trading Account with USD as the Deposit Currency:

  Currency Pair: GBPCHF
  Contract Size: 1.43 lots (143,000 GBP)
  GBPCHF Price: 2.3533
  USDCHF Price: 1.1659 (We need this to convert the value of one pip in the quote currency into the deposit currency.)

  Calculation:

  • 1. First we will calculate the value of one pip in the quote currency (CHF):
    
    OnePipValue = ( 143,000 X (2.3533 + 0.0001) ) - (143,000 X 2.3533) = 336,536.2 - 336,521.9 = 14.3 CHF
  • 2. Next we will convert the value of one pip into the deposit currency (USD).
    
    Here, USD is the base currency in the pair (USDCHF), so we will need to divide the value of one pip by the rate:
    
    OnePipValue = 14.3 CHF / 1.1659 = 12.27 USD
    
    The value of one pip in GBPCHF is equal to 12.27 USD.
    
    If the deposit currency of your account happens to be the quote currency, you will need to instead multiply the value of one pip in the quote currency by the price of the currency pair used to convert the value into the deposit currency.

  The value of one pip for spot gold is fixed and can be found in our Contract Specifications. For the previously mentioned instruments, as well as for other currency pairs, the value of one pip can also be calculated in much the same way as in the example above.

Now let's look at the formulas used to calculate profits/losses on your Forex positions.

For a Buy position:

Profit/Loss = (Contract X ClosePrice) - (Contract X OpenPrice)

For a Sell position:

Profit/Loss = (Contract X OpenPrice) - (Contract X ClosePrice)

• Profit/Loss: profits/losses in the quote currency
• Contract: the contract size in the base currency
• ClosePrice: the closing price of the currency pair
• OpenPrice: the opening price of the currency pair

What happens when I leave my Forex positions open overnight?

When Forex brokers hold your positions overnight, you will be charged for a swap. The amount charged for holding a position open overnight can either be added to or deducted from a trader's account. It all depends on the current interest rates in the countries of the currencies involved in the transaction. This is because the swap fee essentially accounts for the cost of storing money overnight and the interest rate is essentially the cost of storing money. Below, we will provide you with a theoretical approach to calculating overnight swaps. Please keep in mind that in reality, the amount traders pay for storage also depends on factors such as the price movement of the instrument, the behavior of the forwards market and the dealer's expectations. In the examples below, we will focus mainly on the interest rates to make our calculations.

Attention: To make calculating storage fees even easier, we recommend using our Trader's Calculator.

Suppose that the interest rate of the European Central Bank (ECB) is 4.25%, and the FED (US) interest rate is 3.5% per annum and you open a short position (Sell) on EURUSD for 1.0 lot. Here, you are essentially selling 100,000 EUR, borrowing at a rate of 4.25%. By selling EURUSD, you are buying US Dollars, which earn interest at a rate of 3.5%. When the interest rate of the country whose currency you are buying is more than the interest rate of the country whose currency you are selling, storage (the swap fee) will be added to your trading account. If the interest rate is higher in the country whose currency you are selling, as is the case in this example (4.25 > 3.5), storage will be deducted from your acount. It should also be mentioned that a swap also includes the broker's commission for rolling over the position.

Here, the difference between the interest rates is 0.75%. When you factor in the broker's commission of 0.25%, the total amount charged will be a 1.0% annual rate (0.75% + 0.25%). The storage fee will be converted into the deposit currency.

Please Note: When a position is held open in the Forex market from Wednesday to Thursday, the storage fee will be tripled. For a position opened on Wednesday, the value date (the agreed-upon delivery date in the currency futures contract) is Friday. When a position is carried overnight from Wednesday to Thursday, the value date will be Monday, 3 days away (accounting for the tripling of the storage fee).

• Read Close 1

  Example 1: Rollover of Short Positions (Sell) in the Forex market:

  If the interest rate of the country whose currency you are buying is lower than the interest rate of the country whose currency you are selling, storage will be deducted from your trading account.

  The formula to calculate your charge for a swap is:
  SWAP = (Contract X (InterestRateDifferential + Markup) / 100) X Рrice / DaysPerYear

  Let's calculate the storage fee from the position above:

  • Contract: 100,000 EUR (1 lot)
  • Рrice: 1.3500 (current market price of EURUSD)
  • InterestRateDifferential: 0.75% (the difference between the interest rates in Europe and the US)
  • Markup: 0.25% (the broker's commission)
  • DaysPerYear: 365 (number of days in a year)

  Calculation:

  • SWAP = (100,000 X (0.75 + 0.25) / 100) X 1.3500 / 365 = 3.70 USD

  When your short position on EURUSD is rolled over to the next day, 3.70 USD will be debited from your trading account as a storage fee.

• Read Close 2

  Example 2: Rollover of Long positions (Buy) in the Forex market:

  Let's say that the position on EURUSD is a long position rather than a short position (BUY 1.0 lots EURUSD). Here, a small amount will be credited to your trading account for a swap, since the interest rate for the currency you are buying (EUR: 4.25%) is higher than the interest rate for the interest rate for the currency you are selling (USD: 3.5%).

  The formula to calculate your charge for a swap is:
  SWAP = (Contract X (InterestRateDifferential - Markup) / 100) X Рrice / DaysPerYear.

  Calculation:

  • SWAP = (100,000 X (0.75 - 0.25) / 100) X 1.3500 / 365 = 1.85 USD

  When your long position on EURUSD is rolled over to the next day, 1.85 USD will be credited to your trading account.

When the difference between the interest rate is smaller than the broker's commission, you will be charged for the swap for both Buy and Sell orders.

You can find a history of swap charges for short and long positions on currency pairs on our website in our Swap History table. In the table, the swap charges are shown in pips. To find out the amount you will be charged for a swap in your deposit currency, just multiply the value in the table (either "Swap Long" or "Swap Short") by the value of one pip for the currency pair you are trading.

Please Note: When a position is held open in the Forex market from Wednesday to Thursday, the storage fee will be tripled. For a position opened on Wednesday, the value date (the agreed-upon delivery date in the currency futures contract) is Friday. When a position is carried overnight from Wednesday to Thursday, the value date will be Monday, 3 days away (accounting for the tripling of the storage fee).

When the Federal Reserve interest rate is less than the commission charged by the broker, the client pays a storage charge for both long and short positions.

Rollover of Gold Spot

Storage charges for Gold spot are analogous to those for currency pairs. As with currency pairs, the triple storage fees for positions held overnight Wednesday to Thursday apply for Gold spot as well.

Clients who do not wish to pay storage fees may open swap-free accounts at Alpari. The following account types are available: micro.mt4.swapfree, classic.mt4.swapfree and classic.systematic.swapfree. Instead of paying storage fees, holders of swap-free accounts pay a fixed charge which does not depend on interest rates.  The charge is tripled for positions held over from Wednesday to Thursday.