Premiums

[pippinainteasy]

i went long 15 lots usd/yen yesterday at 1:55 pm as of 5 pm today ive collected $67.80 US.??? yesterday at 5pm i collected $16.95 which is correct for 15 lots. how come then i collected and extra $50 or so dollars for this one day.

i also opened two more separate 5 lots of usd/yen this morning each has collected $16.95 a piece????

i also went short eur/usd this morning 5 lots and that has collected $8.55 which is double what it should be.

in no way am i complaining but could someone explain why the premiums im collecting are pretty much double what they should be for the respective lot sizes.
thanks

[ikholod]

Originally Posted by pippinainteasy

i went long 15 lots usd/yen yesterday at 1:55 pm as of 5 pm today ive collected $67.80 US.??? yesterday at 5pm i collected $16.95 which is correct for 15 lots. how come then i collected and extra $50 or so dollars for this one day.

i also opened two more separate 5 lots of usd/yen this morning each has collected $16.95 a piece????

i also went short eur/usd this morning 5 lots and that has collected $8.55 which is double what it should be.

in no way am i complaining but could someone explain why the premiums im collecting are pretty much double what they should be for the respective lot sizes.
thanks

This is probably because the swap rate includes the weekend. This is information posted on my brokers website (I N T E R B A N K F X):

What is SWAP?

Swap is a debit or credit paid or earned as a reflection of the differences of the interest rates in the respective currency pair countries.

If you hold a currency pair through the end of the trading day and into the next trading day (5pm EST) you pay or receive the Swap.

For example, if you are long GBP/USD and US interest rates are lower than GBP interest rates you will earn a credit. If you are short the pair, you would be debited.

When you do a spot deal, the actual value date is two days forward. A deal done on Thursday is for value Monday. A deal done on Friday is value on Tuesday, and so on.On Wednesday the amount is tripled because it includes the previous weekend.

[tdeketel]

Originally Posted by ikholod

When you do a spot deal, the actual value date is two days forward. A deal done on Thursday is for value Monday. A deal done on Friday is value on Tuesday, and so on.On Wednesday the amount is tripled because it includes the previous weekend.

The last sentence is important: "On Wednesday the amount is tripled because it includes the previous weekend."

You now have Tuesday's 16.95 + (3 x 16.95) for Wednesday= 67.80

[Briancio]

This thread explains How Premiums Are Calculated well. There is a section on most broker sites that help out. Boy, whatch out for Wednesdays they cover you for the weekend too, it really is tripled!! It's a funny thing premiums are.

I literally had to have my wife sit down with me and explain it to me.

Brian <><
Up 14.6% in Dec