What are FX Rollovers?

FX spot trades through the Totality platform do not settle. Instead, open positions held at the end of a trading day (1700 EST) are usually rolled forward to the next available business day. In such a case, the opening price is adjusted.

This rollover is made up of two components: the Tom/Next swap points (Forward Price), and the financing of unrealised profits/losses (Financing Interest).  

Rollover Methodology for retail clients:

Normal Forward (price adjustment to the opening price of a position). An example:

The rollover is applied by:

• Adjusting the opening price of a position to include the Forward Price and Financing Interest components:

• OpenRate + Forward Price + Financing Interest = New Rate

• 1.12212923 + 0.000064 + 0.00000218 = 1.12219541

• No closing rate and no closing position is generated for a swap executed using this method.

Totality publishes for full transparency the historic swap points used for the Tom/Next rollover on a daily basis.

You can view the rollover history on your FX positions via the Totality platform.

Year-end ‘turn’ effect in FX swap points:

The “turn” effect is a phenomenon that exists in financial markets which is caused by supply and demand for funding over key dates, such as year or quarter-end. This can create anomalies in the forward curves for certain currencies, which may be priced into the year-end swap points that we receive from our liquidity providers.

Swap points are a key component of the FX Value Date Rollover, which is used to adjust the opening price of a position (applicable to the default rollover methodology). Therefore, if you hold a FX spot position over year-end, you may bear the cost of paying these inflated swap points (depending on the currency pair) when compared to normal market conditions.

‍