Amana’s Financing/Swap Policy is aimed at providing competitive financing conditions to its clients.
Financing/Swap, also known as Rollover , swap or interest fee, refers to the interest that you either earn or pay for a trade that you keep open overnight. Sometimes also called the “cost to carry.“
- Financing/Swap long (used for keeping buy positions open overnight) and
- Financing/Swap short (used for keeping sell positions open overnight).
They are expressed in pips(points) per lot and vary depending on the financial instrument you’re trading.
When trading a currency, you are borrowing one currency to purchase another. The financing/swap interest fee is calculated based on the difference between the two interest rates of the traded currencies.
The Financing/Swap fee is credited or debited once for each day of the week, at midnight server time, when a position is rolled over, with the exception of Wednesday for the spot Forex, WTI, & Brent oil, when it is credited or debited 3 times and of Friday for the cash indices when it is credited or debited 3 times (i.e. 7 swaps in 5 trading days).
The Financing/Swap calculations methods varies according to the instrument as follows:
- By point = (lots x long or short points x point size)
- By money = (lots x long or short)
- By interest = (lots x long or short / 100 / 360)
- By money in margin currency = (lots x long or short)
FX product example:
A client was 2 lots short position on the EURUSD on Monday Feb 4, 2019 and closed it the next day.
- 1 lot = 100,000 euros
- Pip value = $10
- Number of lots = 2 lots
- Swap rate= -8.5 Long & +7 Short
- Holding period = 1 night
- Swap = (Number of lots x Pip value x Swap rate x number of nights) / 10
- Swap = (2 x $10 x 7 x 1)/10 = $14
- The $14 is the holding income earned of the currency pair that was held overnight.
Cash energy CFD example:
A client was 1 lot long on the WTIUSD on Monday Feb 4, 2019 and he closed the position on Wednesday Feb 6, 2019
- 1 lot = 1,000 barrels
- Pip value = $10
- Number of lots = 1 lot
- Swap rate = -1.25 long & +0.75 short
- Holding period = 2 nights
- Swap = (Number of lots x Pip value x Swap rate x number of nights)
- Swap = (1 x $10 x -1.25 x 2) = -$25
- The $25 is the holding cost paid of the energy CFD that was held for 2 nights.
Swap Free Accounts:
Amana offers Financing/Swap Free accounts for traders who choose not to receive or pay daily financing/swaps in adherence with religious principles.
Accordingly, and in the event where a request for Financing/Swap Free account is submitted to Amana Capital, the company on its complete discretion might approve the Financing/Swap Free account but reserves the right to acquire additional documents and justification for the need of this request.
Amana Capital reserves the right to refuse the processing of such a request or revoke Financing/Swap Free status granted to any real trading account, at its sole and absolute discretion without being obliged to provide any explanation or justification and do so with immediate effect without any written notice period.
When trading a Financing/Swap Free account, currency pairs held overnight will not be 'paid or charged' a daily Financing/Swap fee. Financing/Swap Free terms are not applicable on the following:
- FX pairs containing CZK, HKD, NOK, PLN, SEK, SGD, TRY, ZAR, RUB.
- Cash CFDs: U30USD, NASUD, 100GP, E50EUR, D30EUR, F40EUR, SPXUSD, HSI50.SWI20,N25EUR,AUS200,JP225.
- Spot Energies: WTIUSD, BRENTUSD.
- All Shares CFDs
Fees will be applied on a Financing/Swap Free trade in case trading positions are held open for more than (3) or (5) days (depending on account nature and as per email confirmation sent to client), unless waived by Amana. Such fees can be applied from the time the position was opened and at the sole and absolute discretion of the company without being obliged to provide any explanation or justification and applicable with immediate effect without any written notice period.
In the event where Amana detects any form of abuse, fraud, manipulation, cash-back arbitrage, or other forms of deceitful activity pertaining to a client's Financing/Swap Free account, the company reserves the right, at any time and with immediate effect to:
- Revoke the Financing/Swap Free status from all standard trading accounts; and/or
- Correct and recover any un-accrued Financing/Swaps or interest expenses as well as costs pertaining to any Financing/Swap Free trading account during the period for which such account was converted into Financing/Swap Free trading account; and/or
- Close all trading accounts related to a client that breached applicable laws and regulations, annul all its trades with Amana and cancel all profits or losses incurred.