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There are two kinds of Swap Fees. With respect to OasisElite, we only incur the fees covering the costs and dividend adjustments for holding leveraged positions overnight, i.e. (1), not (2). This is because we only trade the Nasdaq-100, and do not trade currencies.
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A swap fee is the cost of maintaining a position in CFD trades overnight.
This fee enables traders to access leveraged products by only paying an initial margin. Essentially, it reflects the borrowing or lending costs associated with the asset(s) tied to your positions. Additionally, if dividends are paid out on a relevant index, long positions will receive a positive adjustment, while short positions will incur a negative adjustment. This adjustment helps align CFD prices with underlying index performance, accounting for the impact of dividends without directly owning the stocks.
Note: Friday is a triple financing fee day for CFDs.
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A swap also refers to the interest paid or earned between the currencies in a currency pair when holding a position overnight.
Swaps can be positive or negative, depending on the interest rate difference between the two currencies. When traders hold a position overnight, they effectively borrow one currency to buy another, and the swap reflects the cost of this borrowing. Interest is paid on the currency being sold and received on the currency being bought. Swaps are calculated daily and can significantly impact the profitability of long-term trading strategies.
Note: Wednesday is a triple swap day for FX pairs, due to the weekend market closure on Saturday and Sunday.
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