Q +A :
and the method that the interest is debited
or credited, is called the rollover (or
overnight roll). This is not something you
have to worry about doing yourself. It’s all
done automatically behind the scenes at 2
p.m. CT, and posted at 4 p.m. CT.
You’ll find the “Rollover Rates” page on
the Market Watch tab in the submenu.
That gives you an idea of the debit or
credit for overnight FX positions. There are
seven fields for each pair: close price, long
open, long swap, long P/L, short open,
short swap, and short P/L. For example,
take a look at the USD/JPY in Figure 1:
The close price was 83.75, the long open
was 83.7479, the long swap was 21.00 yen,
the long P/L was $0.25, the short open
was 83.7425, the short swap was -75.00
yen, and the short P/L was -$0.89. Notice
how the long open is lower than the close
price. With U.S. interest rates higher than
Japanese interest rates, you would earn
more interest being long USD than the
interest you pay being short JPY. The net
interest on an overnight long USD/JPY
position is credited to your account by
closing your long USD/JPY position at
83.75 and reopening it at a lower price of
83.7479. That difference is 21 yen, which
is the long swap. The value of the 21 yen is
$0.25, which is the amount credited to
If you were short the USD/JPY, you’d
look at the short rates. In that case, a short
position would be closed at 83.75 and
reopened at 83.7425. That difference represents 75 yen, which is the short swap.
The value of the 75 yen is $0.80, and is the
amount you’re paying in interest by holding the short USD/JPY position overnight.
Q: Can I trade FX
in an IRA?
A: Not at this time.
FX trading is available only in margin
Q: Can I just start
trading FX in my
to the quoted markets. Should you
choose the commis-sion-based option,
FX trades are subject to a fixed-com-mission structure
based in counter-currency units (the
second symbol of a
pair). For example,
from a 1,000-lot
would be USD $1
and/or $0.10 per
1,000 units). The
commission from a
USD/JPY trade of
5,000 units would
be JPY ¥90.
Forex trading privileges are subject to
TD Ameritrade review and approval.
Not all account owners will qualify.
A: You need to
open a FX account
with us before you
can route forex
orders, and it’s easy
to do. Go to thinko-
rswim.com and log
in to the accounts
Click on the button
to apply for FX
trading on eligible
accounts. That will
take you to a page
that shows your
and another button
to request forex
trading. Click on
that, and you’re on
your way to FX
SET UP, YOU
AND SEE THE
Q: When do FX
Now, even though
you opened a forex
account, that’s only
on the back end.
You’ll be able to
trade FX right
futures, and funds
and see the positions on the trading
platform. You also
don’t have to fund
your FX account
A: Not often. The
FX market is open
Sunday at 4 p.m.
CT to Friday at
4 p.m. CT. Because
the FX market
doesn’t really have
a close during that
time, the value and
profit/loss on any
position you hold is
calculated at 2 p.m.
CT every day.
krone, euro, Japanese yen, New
Swedish krona, and
Swiss franc, the
leverage is 50 to 1.
For all other pairs,
the leverage is 20 to
1. That means for a
position that’s long
the margin requirement is $200. For
the margin is 200
euros. The margin
based on the first
currency of the pair.
Q: What is the
commission on FX
Q: How much
money do I need to
A: If you choose
the non-commission option for your
FX trades, there
isn’t a commission,
but it isn’t free.
trades do not occur
you can only buy
on the offer and sell
on the bid all of the
transaction fees are
implicitly priced in
A: There’s no minimum account size,
but there are margins for FX positions based on the
for the currency.
For pairs between
such as the U.S.