how do swaps work? - page 2
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You missed the point from the swaps my friend, why do traders pay the swaps in first place ?
they pay it because traders borrowed the money ( the leverage money) from the broker to trade bigger amounts! If you traded 1:1 ratio and you kept the money in your pocket will not pay any swap.
and this borrowing action has to have a cost, this cost is the swaps... it has nothing to do with nibbling away customers capital.
So how do you explain positive swap. IE you get payed over the borrowed money.
You missed the point from the swaps my friend, why do traders pay the swaps in first place ?
they pay it because traders borrowed the money ( the leverage money) from the broker to trade bigger amounts! If you traded 1:1 ratio and you kept the money in your pocket will not pay any swap.
and this borrowing action has to have a cost, this cost is the swaps... it has nothing to do with nibbling away customers capital.
Swap is exchange rate on rollover from the previous day to the next.
The positions are supposedly closed at the end of the day, and then reopened the next day, and this involves the exchange rate fees, called swap.
Since there is no rollover on crypto's, they use this mechanism to nibble away customer capital.
It has got nothing to do with the borrowing of money, that is why there is spread and commissions.
So how do you explain positive swap. IE you get payed over the borrowed money.
Exactly this is when the exchange rates are in your favor.
So how do you explain positive swap. IE you get payed over the borrowed money.
Because you borrow one currency to buy an other one. The swap is the combination of both currencies interest rate. That's why one of the 2 swaps should always be positive and other negative, in theory.
Swap is exchange rate on rollover from the previous day to the next.
The positions are supposedly closed at the end of the day, and then reopened the next day, and this involves the exchange rate fees, called swap.
Since there is no rollover on crypto's, they use this mechanism to nibble away customer capital.
It has got nothing to do with the borrowing of money, that is why there is spread and commissions.
Exactly this is when the exchange rates are in your favor.
I am afraid you are wrong Marco, of course the swap is related to borrowing.
I am always wrong.
Not always :-D
Usually :)