cost to hold a forex contract overnight?

Discussion in 'Forex' started by Lois Price, Oct 22, 2007.

  1. could someone please tell me what is the cost to hold a forex contract overnight? Is an amount deducted right at 5 pm or something? I'm using tradestation by the way.

    I'm thinking this is not like futures where you just need a standard overnight margin available...i'm paying interest on this 100,000...right?

    thanks for your help for a newbie...
  2. I believe you're talking about interest. You likely longed a currency which has a lower interest rate than the one you shorted. Personally, I would not hold a pair which pays negative interest very long unless I expected a big payoff to come soon.

    The good news is, you can EARN a good amount of interest if you shorted a currency with low interest rates (JPY) and longed one with higher (AUD).

    Just my thoughts, maybe someone more experienced can go into greater detail.