Can anybody explain what rollover fees are in Forex? I know they are the differences in overnight rates, but I still don't understand them. I saw a chart that had different values for each currency pair, why are some positive and some negative? If this chart is accurate, should I just trade currency pairs with a positive rollover fee?
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March 18th, 2008 at 4:08 am
If you hold a Forex position overnight, you
pay or receive what is called a Forex rollover
fee.
The rollover fee is calculated by the
difference in the Interest rate that
applies to the two currencies in the
currency pairs you are trading.
If you buy a currency pair where the
base currency has a higher interest
rate than the terms currency, then you
receive the rollover, and vice versa!