What is a swap rate ?
Swap rates, also known as overnight or rollover rates, are debits or credits, either earned or paid for holding a position overnight. ACM settles overnight positions at 23:00 CET using market accepted, interbank swap rates.
Where do these rates come from ?
Large institutions that deal in FX put out daily swap rates - prices they are willing to exchange currencies at on a given day. Different tier 1 banks put out different swap rates based on their own risk-management analysis and on market activity. ACM's swap rates are essentially the interbank fee for positions held overnight and are expressed in USD/100'000 lot, with a separate rate for each currency pair.
Why interbank rates rather than benchmark rates ?
Other brokers may continue to offer their overnight rates using an old method that applies benchmark rates based on interest-rate differentials between central banks. ACM believes in maximum transparency and our method, more so than the benchmark method - aligns itself with the market daily. The interbank swap rate further takes into account recent liquidity, market dynamics and volatility on a given currency pair.
Synthetic rollovers for easy account statements
ACM settles its rollovers synthetically - meaning positions are not closed and reopened overnight. Instead, a debit/credit is applied to a trader's statement as a separate line item, making for clear and easy evaluation. ACM applies a triple swap Wednesday evenings to account for weekend rollovers.
Please note: Rates applied will be visible on the ACM website after 23:00 CET and updated after every end of day process.