Trading Conditions

SWAP AND SPREAD RATES IN DB INVESTING
 

The Swap and Spread ratios applied when investing with DB INVESTING are indicated on the table at the bottom of the page below.

For investors who are new to trading, we have briefly summarized what these expressions mean.

Swap
 

Swap Fees are the cost of a trade that is applied to transactions that are open at the end of the day resulting from the difference between the interest rates of the countries to which the currency pair is traded. “Forex” money is lent money in Forex markets and “Sold” money is borrowed. According to this logic, you can see the swap income or cost as follows in the simplest way;

Swap position
 

If the interest rate of the received money is low and the interest rate of the money being sold is high (-), the cost is deducted from the investor’s account.

If the interest rate of the sold money is low and the interest rate of the money received is high (+) It is returned to the investor as income

It would be better if we explained this with an example applied in DB INVESTING.

Currency Rate Short Swap (percent) Long Swap (percent) Trading Hours

EURUSD 1.67 -7.93 Mon 00:00 – Fri 23:00

Rules Regarding Swap Fees

  • Swap costs or revenues are not applied to positions closed on the same day. Swap rates apply to positions that are still open at the end of the day.

  • Change swap balances because the interest rates of the countries to which the relevant currency units belong.

  • A 3-day swap is applied to positions that are not yet closed on Thursdays (equivalent to the value of the weekend) because the Forex market is valued at +2 days. On other days this practice is 1 day.

  • You can choose the Islamic Account option as a non-swap-based application.

 

 Spread

The difference between the buying and selling prices of financial assets is called “Spread” and expressed in “pip” unit.

For example, if the buying price is 1.1225 and the selling price is 1.1223 in the EURUSD parity, this spread is 2 pips for Spread (1,1225-1,1223 = 0,002). Therefore, when you open a lot (i.e. 100 thousand units) in one lot, you will end up with a cost of 0,0002 * 100,000 = 20 USD Spread.

It is only the cost to open this position. If the parity reaches 1,1227, your cost will be zero. Spread, which is an important cost for the investor, can be fixed or variable. Variable Spread is low at times of increased liquidity in the markets, but may be high in liquidity shortage. Fixed Spreads are fixed values offered to investors of brokerage houses.

DB INVESTING Account Types

There are 3 different accounts in DB INVESTING that you can use according to your needs and preferences. The main difference between them is the Spread ratios to be applied to the operations.

Fixed Account: the spread is fixed and unaffected by price fluctuations on the market.

Floating Account: the spread is a variable, depending on the market volatility or the asset being traded.

Islamic Accounts: Accounts that are traded according to Islamic rules, not applying a swap interest. And it can be used with all three of the above. This account is reserved just for the Arabic nationality people.

O/N Overnight – Overnight spreads can vary according to market conditions. Overnight hours means from 23:00 until 08:00 GMT +3.