Our swap rate for Margin FX Contracts is a variable rate that is dependent on the currency pair, the applicable swap rate in the interbank markets for the relevant dates, the size of the Position and the AxiCorp Spread.
The interbank swap rate reflects the interest rate differential between the two currencies, the demand for funds in those currencies and the prevailing market conditions.
Example: If you hold a long Australian Dollar / US Dollar (AUD/USD) Position over End of Day and interest rates are higher in AUD than in USD, then you will normally receive a Swap Benefit at the AxiTrader Swap Rate. This is because you are long the high yielding currency. Conversely, if you were short AUD/USD then you will normally incur a Swap Charge at the AxiCorp Swap Rate. In circumstances where the two interest rates are near parity, almost equal to each other, a Swap Charge may be imposed for both Long and Short open Positions.