Hey there,
I was researching currency rings with no market exposure (at least with only minimal leakage) that should collect swap interest. As one could expect, there is no money laying around and all rings turned out to have negative swap or in rare cases to break even.
But I recently opened a live account with InstaForex. Their swap rates are quite good so I ran my scripts just for fun. It turns out there is a hedge that would break even after around 20 days with absolutely no market exposure. This seems too good to be true so I digged into their agreement:
5.8. In case there is a complete lock positions, including the system with the triple lock and others, despite the presence of the complete lock of all position at the account, the total swap on the lock positions is not equal to zero, the Company and a Client are obliged to correct the swap, because with the absence of the non-lock share of the position the total swap can be neither positive nor negative.
I really don't understand what this means. Maybe someone can decipher it. Is it allowed to collect swap from a hedge with no market exposure?
Thanks for your help! |
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