At FNmarkets, overnight refunds are positive swap credits made to a trader's account when positions are held overnight. These occur due to the difference in interest rates between the currencies involved in the trade.
Here’s how it works:
1. If the currency you buy has a higher interest rate than the one you sell, you may earn a credit (also known as an overnight refund) for holding the position overnight.
2. If the currency you sell has a higher interest rate than the one you buy, a swap fee may be charged for keeping the position overnight. This is considered a cost, not a refund.
Example:
Buying AUDUSD: Since AUD has a higher interest rate than USD, if you hold the position overnight, you may receive an overnight refund (positive swap).
Selling AUDUSD: If you sell AUDUSD, you may pay a swap fee because USD has a higher interest rate than AUD.
These overnight refunds can serve as positive swap earnings, making them a key consideration for overnight traders The amount and availability of refunds are influenced by factors such as market conditions, interest rate differences, and FNmarkets' policies.