At FNmarkets, overnight refunds are positive swap credits that may be applied to trading accounts subject to standard swap conditions when positions are held overnight. They occur due to differences in interest rates between the currencies involved in the trade.
Please note: Eligible Swap-Free Accounts generally do not receive or incur standard overnight swap credits or charges while Swap-Free status remains active, in accordance with the Swap-Free Terms and Fair Use Policy.
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.