I'm using 3 brokers for live trading now, and wonder who decides what the swap-percentage of a given pair is.
In my immature brain, I figured that the intrestrate from the central banks is the main part of the swap, but the difference is to big between brokers.
On one broker I need to pay swap for a given pair, while on another one, I even receive swap for the same pair/ direction.
Besides spread and commission, this could be another point to take in consideration when deciding to choose which broker to trade with.
Anyone who can enlighten me?
WHO makes the SWAP rates??
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Gertje
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Jemook
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WHO makes the SWAP rates??
Hi Gertje,
On a higher level:
https://www.thebalance.com/how-are-inte ... ed-3306110
and then on the broker level:
Each broker has their own swap rates which is derived from whoever is giving them liquidity. However in the case of a b-book broker they can just make up their own swap rate as they don’t have to pay a counterparty as their clients positions aren't in the real market. So they earn 100% of the swap by their clients.
Brokers like Global Prime who have Prime Broker relationships get their swap rates from their prime broker and pass that on to the clients. When clients place a trade they are real positions in the market so GP owes swap to their Prime Broker for those positions held overnight.
Cheers
Jeremy
On a higher level:
https://www.thebalance.com/how-are-inte ... ed-3306110
and then on the broker level:
Each broker has their own swap rates which is derived from whoever is giving them liquidity. However in the case of a b-book broker they can just make up their own swap rate as they don’t have to pay a counterparty as their clients positions aren't in the real market. So they earn 100% of the swap by their clients.
Brokers like Global Prime who have Prime Broker relationships get their swap rates from their prime broker and pass that on to the clients. When clients place a trade they are real positions in the market so GP owes swap to their Prime Broker for those positions held overnight.
Cheers
Jeremy
Please note I am no longer affiliated with Global Prime. I've moved on to my next adventure with Afterprime.
Catch me here: https://www.afterprime.com
Catch me here: https://www.afterprime.com
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tomele
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WHO makes the SWAP rates??
Which doesn't mean that ECN brokers (other than Global Prime) can't tweak the customer swap rates to make some extra dollars, right?Jemook » 29 Jul 2019, 02:39 wrote:Brokers like Global Prime who have Prime Broker relationships get their swap rates from their prime broker and pass that on to the clients. When clients place a trade they are real positions in the market so GP owes swap to their Prime Broker for those positions held overnight.
Happy pippin, Thomas 
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billv
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WHO makes the SWAP rates??
Yes they all do.tomele » Tue Jul 30, 2019 5:27 am wrote:
Which doesn't mean that ECN brokers (other than Global Prime) can't tweak the customer swap rates to make some extra dollars, right?
I recently complained to Crappy Bully Pepperstone ( because they were charging me -ve swap for long GBPJPY trades) and I received their standard reply.
"We don't set the swaps, they are set by our liquidity providers blah blah blah "
I know they are cheating because my other 2 live brokers had much different swaps.
I should collect data and complain to ASIC directly