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Forex question How does roll over affects my position?
avatar Phoebe
Question by: Phoebe - 10 Feb 2017, 01:18:18
How does roll over affects my position?
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Answers (1)
avatar user 11882
Answer by: BoyceAve - 10 Feb 2017, 01:24:38

Rollover is the interest paid or earned for holding a position overnight. Each currency has an interest rate associated with it, and because forex is traded in pairs, every trade involves not only two different currencies, but their two different interest rates. If the interest rate on the currency you bought is higher than the interest rate of the currency you sold, then you will earn rollover (positive roll). If the interest rate on the currency you bought is lower than the interest rate on the currency you sold, then you will pay rollover (negative roll). Rollover can add a significant extra cost or profit to your trade.

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