Daily rollover (swap) interest for IB spot forex trading.
I want to open an IB (interactive broker) trading account for spot forex.
I have no way to find the place for daily position carrying interest (rollover or swap).
Is there a place to set your leverage level, e.g., 1:30 or 1:100.
It is NOT clear how the rollover (swap) being calculated. For example, I have $10K cash in my account and I want to long $100K GBP.USD. How the interest is calculated daily? Do I get interest paid if I long the higher interest currency.
I made some small spot Forex trades last year in the US, and I have recently read that the IRS generally considers the OTC market to be trades which are settled within 48 hours, if I remember the wording correctly. Does that mean that any trades that went on for longer than that are subject to a whole other set of rules, ie, not Section 988, and have to be reported using other form(s)? I had maybe one trade that went on for at least a few days, just a few bucks too. Edit: Does that mean just that trade is now subject to 1256? Or all my trades? Also, I thought you had to make you election of either 988 or 1256 before the beginning of the year, which I can't do because the time is already passed.
I was reading some post over at maths, and from there, found some books on Stochastic Calculus (SC) in Finance. At first glance, it seems to apply to derivatives. I was wondering, if SC has application to Forex? Of the other forecasting methods, SC seems to be based on a rigorous foundation and hopefully encompassing a wider variety of financial instruments. But I am still not finding a clear answer on whether it has applications in spot Forex. All search results lead to SC for options or derivatives. Is it possible to use SC for Forex?
Spot Forex trading based on Open Interest in FX Futures.
Some time back, Commitment of Traders (COT) in Forex futures was suggested here as a helpful indicator of market sentiment, and its usefulness in spot FX trading. There is a babypips chapter on it. It is also mentioned in John Murphy's Technical Analysis of the Financial Markets. The two seem to diverge in *how to use information on Open Interest. According to Babypips, we should focus on Non-commerical (speculators): when they take the net short positions in one direction, the market is ready to move in the other direction, usually. From John Murphy's book:
The guiding principle in analyzing the Commitments Report is the belief that the large commercial hedgers [blue curve in babypips chart] are usually right, while the traders are usually wrong. That being the case, the idea is to place yourself in the same positions as the hedgers and in the opposite positions of the two categories of traders.
Now, both are basically saying the same thing, but they use different categories contributing to open interest. It might happen, that they both are not always strongly correlated? That is, it is not necessary that when Commercial trader (hedgers) take one extreme of positions, the Non-commercial traders (speculators) take the other extreme. For those who follow COT reports, which trader do you focus on? Or are they always anti-correlated, so it doesn't matter which you follow?
I did a search, but nothing about it came up on this sub hence this post. On babypips they mention using the COT reports to gauge sentiment. Does anyone here currently utilise this methodology with their trading?
FOREX.com is a registered FCM and RFED with the CFTC and member of the National Futures Association (NFA # 0339826). Forex trading involves significant risk of loss and is not suitable for all investors. Full Disclosure. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. What Is Spot Trading? Did you know that when you are trading Forex through an online broker, you are actually trading through the spot market?Most people don’t give much thought to the nuances of the Forex market, which in a global sense includes all spot, futures and swap trades.If you’ve ever gone to the money changer or the bank to exchange one currency for another, you’ve ... Spot forex trading was initially developed by banks to cater to the needs of big corporations, making money from the spread of express transactions. Overtime, spot forex trading was made available to retail investors. Today, the market is massive and its tremendous growth has been attributed largely to independent dealers and retail investors. The Spot Market. According to common forex market terminology, a currency deal done for value spot is commonly known as a spot transaction, deal or trade. The spot market is where currencies are bought or sold against other currencies according to the prevailing price for this popular value date. A spot trade is the purchase or sale of a foreign currency or commodity for immediate delivery. Education ... Learn About Trading FX with This Beginner's Guide to Forex Trading.
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