These days, more FX brokers offer their clients swap-free accounts. What are the benefits and advantages of such accounts? Can we count on more substantial profits while making use of them? The expert team of an FX company named Orbex helped us to answer these questions.
Why Don’t FX Traders Like Swaps?
In the Forex market, swap is the procedure of simultaneously purchasing and selling identical amounts of one currency for another with two different value dates. To make it simpler, this is the procedure of extending the open trade overnight& This is done via the worldwide standard know as SWAP TOM NEXT. It implies closing each of the open trades to reopen it instantly as the new day comes. IF this s a long-term or mid-term position (no an intraday one) this happens once every 24 hours. This happens instantaneously, which is why traders do not even notice it. The only thing the say is the swap credited, which can be both positive and negative
Swaps exist because any currency pair consists of 2 currencies emitted by 2 central banks. Those 2 banks have different interest rates. The difference between those interest rates forms a swap - positive or negative depending on the situation. Still, more often than not, swaps are negative, which means that a certain amount of money is written off your account each time a negative swap occurs.
This is a drawback for all FX traders who abstain from intraday trading and prefer longer-term strategies.
At the same time, swaps may affect even short-term traders who trade overnight for relatively tiny profits, which can be reduced to nothing by those swaps. This leads us to believe that most FX traders have swaps and would like to trade without them. That is why client-oriented FX brokers like Orbex decided to help their traders get rid of this drawback.
Benefits of Swap Free Accounts by Orbex
This is what Orbex can offer those who seek opportunities to trade without swaps. The official website reads:
https://www.orbex.com/en/swap-free-account.html
Orbex offers swap-free accounts (also known as Islamic Forex accounts or Shariah Forex accounts). These accounts comply with Islamic religious beliefs. According to the Islamic religion, any business transaction in which one of the parties has to pay or receive some interest from another party is forbidden.
Islamic Forex accounts are also known as swap-free Forex accounts, because, within this kind of account, no swap or roll-over interest will be charged to or incurred on positions that are held overnight.
Islamic Forex accounts are designed specifically for Muslims as swaps contravene their religious beliefs and to clients who don’t wish to be charged swap fees. Islamic accounts give their owners an opportunity to hold their positions for an unlimited amount of time.(Trading Conditions Apply).
To open a swap-free account, please go to the Orbex online account opening form and choose the swap-free account option.
Investor Alert:Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. There is a possibility that you may sustain a loss of some or all of your investment and therefore you should not invest money that you cannot afford to lose.
