Did You Know You Can Earn
Interest While Trading FX?
Earn passive income before interest rates come down!
As inflation cools, the interest rates set by most major central banks have plateaued. 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 diminish. As of 31st Jul 2024, the interest rates of relatively high yield currencies were 5.50% for USD, GBP 5.25%, EUR 4.25%, and AUD 4.35%. The European Central Bank has already begun to lower interest rates, and the US and UK are expected to follow suit.
The Bank of Japan and Swiss National Bank have maintained relatively looser interest rate policies. The yen has ended its negative interest rate policy, shifting the benchmark rate from -0.1% to 0 to 0.1% before further adjusting the rate to 0.25% in July, but still remains at a much lower rate compared to other major currencies. The Swiss franc, though, has adjusted its rate to 1.25% 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 in the second quarter, for example, the daily interest rate return for each lot is HKD11.942, and the required margin is only as low as HKD3,9061.
2. The average daily interest rate is calculated by the total interest amount earned between Apr to Jun 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.
top ten overnight interest in the past 30 days
| Currency Pair | Buy/Sell | Average Daily Interest (HKD)+ | Total Interest (HKD) |
|---|
+ Average daily interest is calculated by dividing the total interest by the number of days. If the data date includes a Wednesday, "3-Day" overnight interest will be shown as interest for the weekend settlement.
The data above are for reference only. The actual interest may differ. Please refer to your trading account for the actual rates.
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
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 31st Jul 2024, wide interest rate differences still remain:
- Higher yielding currencies include USD: 5.50%, GBP: 5.25%, EUR: 4.25%, and AUD: 4.35%
- Lower yielding currencies include JPY: 0.25%, and CHF: 1.25%
- The interest rate differences between the USD and JPY remain the widest 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
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 for the past 30 days, 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 |
|---|---|---|---|
| - | - | - | - |
| 存入金額 | 貨幣對 | 買賣方向 | 交易手數 |
|---|---|---|---|
| - | - | - | - |
| 平倉價(如有) | |||
| - | - | ||
| 槓桿比率 | 維持保證金水平 | 自動平倉水平 |
|---|---|---|
| - | - | - |
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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