Rollover/Interest Policy

At 5:00 PM New York Time, funds are subtracted or added to accounts with open positions because of the automatic rollover. For accounts that have a margin requirement of 2% or more, funds are added to the account for positions in which the client is long (holding) the currency bearing the higher interest rate. Funds are deducted in the opposite circumstance. For accounts that do not have a 2% margin requirement, the rollover amount is deducted from the account for each position regardless of the account's holdings. This 2% margin is available to traders in the forex industry, as many firms require 3-5% minimum margin.

Note: On Wednesdays, the amount added or subtracted to an account as a result of rolling over a position tends to be around three times the usual amount. This "3-Day" rollover accounts for settlement of trades through the weekend period.

Why does Rollover take place?

In the spot forex market, trades must be settled in two business days. If a trader sells 100,000 euros on Tuesday, the trader must deliver 100,000 euros on Thursday, unless the position is rolled over. As a service to our traders, FXCM automatically rolls over all open positions to the next settlement date at 5:00 PM New York time. Rollover involves exchanging the position being held for a position expiring the following settlement date. The positions being exchanged are usually not valued at the same price. The amount of the difference varies greatly based on the currency pair, the interest rate differential between the two currencies, and fluctuates day to day with the movement of prices.

Types of Orders

The trading platform provides sophisticated order entry and tracking of market orders, entry orders, stop/limit entry orders, and stop-loss orders. All of the above orders are Good Until Cancelled (GTC), which is valid until the order is executed or cancelled.

Deposit Options

In addition to the US dollar, traders have the option of depositing funds and viewing all trading information in EUR, GBP, or JPY. For European and Asian clients in particular, this option will be of great convenience in handling all the administrative duties of trading -- thus allowing traders to focus more of their attention and energy on analyzing and profiting from market movements.
Learn More about GBP and EUR denominated accounts.

Margin: Managing your Risk in the FX Market

By trading on margin, traders have the ability control positions much larger than there deposit. The margin deposit for leverage is not a down payment on a purchase of equity, as many perceive margins to be in the stock markets. Rather, the margin is a performance bond, or good faith deposit, to ensure against trading losses. This is very useful to short-term day traders who need the enhancement in capital to generate quick returns. However, leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains. To help manage your risk, FXCM offers a unique margin watcher feature, which is embedded in the platform. If the equity in your account drops below the margin required to maintain your open positions, the dealing desk will close all open positions. This guarantees limited risk. You also have the ability to track your margin in real time. In the accounts window you will see two columns: used margin and usable margin. The used margin indicates funds currently pledged towards open positions. You can think of usable margin as your "wiggle" room. Once usable margin reaches zero, a margin call will ensue and all open positions will be closed by the dealing desk.