Know all about Swap Points on MetaTrader4 trading platform.
Unless you have a swap free Islamic MT4 account with Yadix, all your open positions held over night(the server time in GMT+2 or 3) are subject to swap charges.
Swap points are variables and changes daily or randomly depending on the liquidity providers.
So in case you are looking to earn profits by Swaps by trading, you may want to check the swaps often and know the cost of tradings.
What is ‘Swap arbitrage’? and Is it allowed?
Arbitrage trading is one thing many brokers prohibit as they categorize the trading method as an illegal activity and arbitrage does not bring much profits to some brokers.
But in case of Yadix which business model is a complete STP, arbitrage trading of swaps are allowed in its MT4.
Basically Yadix only prohibits latency arbitrage trading especially on CFDs.
This is because CFD trading is carried as OTC trading, and giving an unauthorized advantages to traders by latency arbitrage is simply a loss for Yadix.
When Swap charge will happen?
Swap charges occur at 00:00 in server time, but not so precisely.
The process itself may take a few minutes, so you may want to see give it a bit time for swap charge or credit.
As swap charge/credit only occurs as 00:00 in server time, you will not get charged during days even you hold a positions opened 23 hours.
Index/Stock CFDs have Swap Charges?
Swap is caused by the difference of interest rates of each currency.
So basically minor currencies normally have high interest rate, and Forex Pairs with these minor currencies will have higher swap charges or credits for investors.
In case of Index and Stock CFDs, interest rate is not related to the tradings, but dividend payment is.
So generally speaking, you will be able to earn the dividend if you hold a long open position of Index or Stock CFDs, and get charged if you hold a short open position of them.
Dividend payment is in another word, bonus payment for share holders.
But still the process will be done as swap charges for these financial instruments in MT4.
Conditions of Swap Free Islamic Account
Yadix may offer Islamic account where there is no swap charges to Muslim traders.
If you are not allowed to receive interest(extra profit) by your religion, please contact Yadix support team to setup a swap-free account for yourself.
You may be required a document to prove your religion.