Storage and Swaps
Storage is a mechanism used for Sharia Compliant accounts where interest cannot be received nor paid out by our clients.
Storage fees are applied to any contract or product which is not a future (and therefore does not have a set expiry date). Storage will be paid after 14 days of holding open a position, and is a charge reflecting the counterparty costs to 888 markets.
Swaps are small interest payments that are made each night once all foreign exchange balances are settled. Each currency has an interest rate associated with it, and because spot forex is traded in pairs, every trade involves not only two different currencies, but also their corresponding interest rates.
If you buy 1 Lot of EURUSD, you are long EUR and short USD:
0.75% – 0.25% – 1% adjustment = 0.5% – 1% = -0.5%
(128000 * -0.5%) / 365 = -$1.75 per day.
Therefore you would pay a $1.75 charge per day.
If you sell 1 Lot of GBPAUD, you are short GBP and Long AUD:
3% – 0.5% -1% adjustment =2.5% – 1% = 1.5%
(144000*1.5%) / 365 = AUD 5.91 per day
Then multiple by the AUDUSD rate to get a USD value
You would earn 5.91*1.0420 = $6.16 per day.