Did You Know You Can Earn
Interest While Trading FX?
Earn passive income before interest rates come down!
As inflation cools, interest rates have reached peak levels amongst a vast majority of central banks. Market participants widely anticipate the interest rate cut cycle of various countries to commence during the second half of the year, and as a result, the interest rate margins from carry trades are expected to tighten. As of 31st Mar 2024, the interest rates of relatively high yield currencies were 5.50% for USD, GBP 5.25%, EUR 4.50%, and AUD 4.35%, unchanged from Q4 of 2023. Meanwhile, JPY and CHF remain on the other side of the spectrum with their relatively looser monetary policies. Although the Bank of Japan raised the benchmark rate from -0.1% to 0 to 1%, it still remains much lower than other major currencies. The Swiss National Bank, though, has lowered its rate to 1.50% from the previous 1.75%.
The different approaches taken by the central banks in terms of monetary policies have led to interest rate gaps between the currencies. When the interest rate of the "long" currency is higher than that of the "short" currency, a positive rollover rate income is generated.
Z.com Forex provides ultra competitive spreads to clients. With the use of leverage, clients may increase potential returns while keeping trading costs to the minimum. You may not only earn profits from trading FX, but also interest rates. Using the USD/JPY pair in the previous quarter, for example, the daily interest rate return for each lot is HKD11.972, and the required margin is only as low as HKD3,9031.
Distinct Characteristics of FX Trading
Hold High Interest Rate Currencies and Earn Daily
Generate extra income in addition to your FX trading gains
Buy and Sell Anytime
High flexibility with no fixed commitment period
Daily Rates Open and Transparent
Ultra competitive rollover rates. Historical rates available
2024Q1 Top 2 Currency Pairs with Highest Interest Rate Return
Required Margin1
Approx. 3,903 HKD
Earn Overnight Interest2
Average 11.97 HKD Per Day
Total Return Between Jan and Mar
1,088.88 HKD
Required Margin 1
Approx. 2,853 HKD
Earn Overnight Interest2
Average 7.81 HKD Per Day
Total Return Between Jan and Mar
710.68 HKD
- 2024Q1 Overnight Interest Rate Ranking by Currency Pair
Profits and Losses from High Interest Rate Currencies Explained
*The data below are for reference only. The USD/HKD exchange rate is fixed at 7.85 for illustrative purposes, and the actual rates may differ. Please refer to your trading account for the actual rates.
- Earning from Trades along with Positive Overnight Interests
- Losing from Trades while Earning Positive Overnight Interests
- Earning from Trades while Losing Overnight Interests
- Losing from Trades along with Overnight Interests
Tips on Overnight Interest
How is a High Overnight Interest Rate Generated?
- As of 2024 Q1, wide interest rate differences still remain:
- Higher yielding currencies include USD: 5.50%, GBP: 5.25%, EUR: 4.50%, and AUD: 4.35%
- Lower yielding currencies include JPY: 0 to 0.10%, and CHF: 1.50%
- The interest rate differences between the USD and JPY remain the wident amongst the major currencies：
- Buying the USD/JPY pair is equivalent to borrowing JPY at a low rate and subsequently buying the higher yielding USD to create a positive interest. Due to the wide interest rate gap between the two currencies, the effect of carry trade has been magnified
How to Earn Overnight Interests?
- Overnight interests will be generated by holding positions overnight at 6:00 a.m. Hong Kong Time (New York Winter Time) or 5 a.m. Hong Kong Time (New York Summer Time), and will be reflected in the account balance automatically (more details)
For open positions held overnight through Wednesday's Trading Close, "3-Day" overnight interest will be realized in order to account for the settlement of trades through the weekend period. - You may earn interest by buying a relatively high interest rate currency. Conversely, you will need to pay interest for holding a relatively low interest rate currency
How to Check the Overnight Interests?
- The Rollover Calendar, showing the historical rollover price provided by Z.com Forex
https://forex.z.com/hk/en/forex_trading/rollover_calendar.html
The Pros and Cons of Using Leverage In Foreign Exchange Trading
- Foreign exchange involves leverage (max. 20 times as specified by the SFC). All interest rate effects, along with changes in the prices, will be magnified
- High flexibility with no fixed commitment period
- Please be aware of the possibility of trading losses incurred while holding positions overnight to earn interest rates
2. The average daily interest rate is calculated by the total interest amount earned between Jan to Mar 2024 divided by 91 days
All data provided are for reference only, and do not constitute any offer, solicitation or advice for any investment products.
Calculate the Expected Return
Get the following data through the Simulated Calculator:
Required Margin
Required margin for opening new orders
Maximum Trade Lots
The maximum lots you can open according to your deposit amount
The Value of Pips
The value of pips converted to HKD
Profit & Loss
Simulate the profit or loss from closing the position
Overnight Interest
Calculate the total interest income/expense
- The simulated result is for reference only, the simulated calculator may be slightly different from the real situation, and the real account shall prevail
- The interest rate is calculated by the average interest rates between Jan to Mar 2024, and may different from the actual rates. Please refer to your trading account for the actual rates.
- Only applicable to USD related currency pairs
Simulated Calculator
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所需保證金: -
| 賣出 | 買入 | 點差 | 每點價值 |
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| 存入金額 | 貨幣對 | 買賣方向 | 交易手數 |
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| - | - | - | - |
| 平倉價(如有) | |||
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| 槓桿比率 | 維持保證金水平 | 自動平倉水平 |
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| - | - | - |
計算後預期盈虧: -
Such Information does not constitute an invitation or offer by Z.com Forex, or represent the price at which Z.com Forex would be willing to offer and does not constitute any advice or recommendation to conclude any transaction.
No statement, representation or warranty, express or implied, is given by Z.com Forex as to the information's accuracy, completeness or appropriateness for use in any particular circumstances. Z.com will not liable for any errors or omissions for the Information provided, nor for any damages or losses arising from any actions taken in reliance on the Information provided.
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