Take a Break
Forex swap-free account is intended for traders who use trading systems without adjustment to swaps or for the customers who are not allowed to receive swaps owing to their religious beliefs. It determines the second name of this accounts type: "Islamic accounts". If you enable the forex swap-free option, all other trading conditions of Standard or Eurica accounts remain the same.
A forex swap is a commission or rollover interest charged by a broker for extending a trader’s position overnight. This is the reason why most traders refuse to prolong a deal until the next day.
How to calculate a currency swap? For instance, a trader wants to keep a position open until the day to follow. In this case, he has to pay a commission or swap for extending a position overnight. A currency swap is calculated on the basis of a differential between interest rates. Let’s take an example. NZD 1.75% – USD 0.5% = 1.25%. This differential should be divided by 365 days, thus we get a percentage value which has to be paid.
A forex swap could be either positive or negative.
Recently, forex swap-free accounts or Islamic accounts have been introduced in the forex market. Traders do not have to pay a commission for using such accounts. In other words, a broker does not debit any money from an Islamic account for an overnight position on any currency pair. So, a trading result will depend only on exchange rates in a particular time frame. Forex swap-free accounts are targeted primarily at the Muslims who are not allowed to trade using long-term strategies by Islamic law. Indeed, payment of interest like a swap is prohibited by Shariah law. Besides, such accounts are used on trading platforms which operate without adjustment for swaps.