A couple interest rollover ideas.

Discussion in 'Forex' started by TulsaTrader, Mar 27, 2008.

  1. I wanted to throw some interest/swap/rollover ideas out here and get a bit of feed back.

    Idea 1 - Go long/short a pair at a broker that accrues interest by the second. Make sure the pair is interest positive with your position. At another broker that only cedits/debits rollover interest daily, hedge the pair with an opposite position. Hold the hedge for 23-ish hours and then close the trade before the rollover cut off (5 eastern or whatever it is).

    Example: Long EUR/USD at "interest by the second" broker, short EUR/US at "Interest paid daily" broker. Open the trade at 5:30 pm eastern, close it at 4:30 eastern the next day so you don't pay the rollover interest. This way you hedge your position during the day for "free" (minus spread and or commission).

    The problem: Is there a pair that pays enough interest to overcome the spreads between the two brokers?


    Idea 2 - Once again go long a pair at one broker and short the pair at another broker. Find 2 brokers where there's enough of a difference in the interest earned vs interest paid that you make money. In this scenario you don't close the trade each day.


    Ok - last one and I'm done :) - Same as Idea 2, but open one account at a forex firm that has accounts for Muslims (doesn't pay or charge swap interest). Then open an account at a firm that does pay interest.

    The other issue you'd have to contend with is having enough money on hand ready to wire in to the accounts in case a position moves to far in one account. You need time to get the money from one account to the other so you don't get a margin call.

    Just curious if anyone has looked into this and found any descrepancies between brokers large enough to be worth it.

    Thanks.

    TT