The foreign exchange market is recognised as the largest spot market in the world.<\/p>\n
Previously, the foreign exchange market, or Forex market, was restricted to large financial institutions. Thanks to the wizardry of modern technology, however, retail FX trading has grown in popularity.<\/p>\n Nowadays, it\u2019s straightforward for retail traders to open a margin account with a Forex broker. IC Markets allows clients to open an account with as little as 200 USD or currency equivalent, with the application process taking only a few minutes. IC Market\u2019s mission is to provide traders with the lowest spreads and fastest executions possible across more than 285 products including Forex, precious metals, stocks, futures and other commodities.<\/p>\n Spot market transactions can take place on an exchange or over-the-counter (OTC).<\/p>\n A spot transaction refers to an exchange of currencies at the current market rate.<\/p>\n Although the FX spot market means \u2018on the spot\u2019 or \u2018immediate\u2019, funds are actually exchanged on the settlement date, typically two business days following the agreement, expressed as T+2. Notable exceptions are currency pairs such as USD\/CAD, which settle one business day after the trade, T+1.<\/p>\n In order to allow for a seamless trading experience, as most market participants trade for speculation, Forex brokers roll<\/em> positions forward (at the rollover<\/em> date) on your behalf and charge a swap<\/em>. MetaTrader 4 (MT4) FX swaps are calculated on the overnight lending rates in the interbank market, provided to Forex brokers from liquidity providers.<\/p>\n If brokers failed to roll trades, you\u2019d effectively have to buy\/sell your existing position every two days. The swap tab highlighted in figure A is where you\u2019ll find your swap credit\/debit value for any active trades open longer than one day (past 5pm EST) on your MT4 trading platform.<\/p>\n (FIGURE A)<\/p>\n Apart from Wednesday, your account will, assuming a position is left open after the NY close, either earn credit or be charged a debit (this depends on the interest rates of the currencies traded). Usually, credit is earned if the long<\/em> currency\u2019s interest rate is higher than the short currency. Similarly, the account may be debited if the interest rate of the short currency is higher than the long currency.<\/p>\n FX brokers apply triple swap on Wednesday because that\u2019s how it\u2019s applied by the banks providing liquidity to the FX market. Remember, FX spot trades usually have a two-day settlement. Triple interest is applied to FX trades at 5pm Wednesday (NY close) as this marks the beginning of a new 24-hour trading day (Thursday) in the global FX market. As the position takes two days to settle, the trade would settle on Saturday when banking institutions are closed, hence the triple interest\/charge into Wednesday\u2019s close to cover this.<\/p>\n <\/p>\n <\/p>\n <\/p>\n The accuracy, completeness and timeliness of the information contained on this site cannot be guaranteed. IC Markets does not warranty, guarantee or make any representations, or assume any liability regarding financial results based on the use of the information in the site.<\/p>\n News, views, opinions, recommendations and other information obtained from sources outside of www.icmarkets.com.au, used in this site are believed to be reliable, but we cannot guarantee their accuracy or completeness. All such information is subject to change at any time without notice. IC Markets assumes no responsibility for the content of any linked site.<\/p>\n The fact that such links may exist does not indicate approval or endorsement of any material contained on any linked site. IC Markets is not liable for any harm caused by the transmission, through accessing the services or information on this site, of a computer virus, or other computer code or programming device that might be used to access, delete, damage, disable, disrupt or otherwise impede in any manner, the operation of the site or of any user\u2019s software, hardware, data or property.<\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n [1]<\/a> https:\/\/www.bis.org\/statistics\/rpfx19_fx.pdf<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Financial markets are a mystery to many, thought to be overloaded […]<\/p>\n","protected":false},"author":7,"featured_media":42290,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[220],"tags":[248,449,335,228],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/42258"}],"collection":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/comments?post=42258"}],"version-history":[{"count":17,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/42258\/revisions"}],"predecessor-version":[{"id":42292,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/posts\/42258\/revisions\/42292"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/media\/42290"}],"wp:attachment":[{"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/media?parent=42258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/categories?post=42258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.icmarkets.com\/blog\/wp-json\/wp\/v2\/tags?post=42258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.icmarkets.com\/blog\/wp-content\/uploads\/2020\/08\/IMAGE-1.jpg\")
<\/a><\/p>\nExchange Vs. OTC<\/strong><\/h2>\n
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Settlement<\/strong><\/h2>\n
<\/a><\/p>\n<\/a><\/p>\n