A: Yes, foreign exchange
Foreign exchange gold trading is conducted through a foreign exchange broker for quotation docking with the market or financial institutions. In the process of trading, there is a saying that overnight positions are held. Then overnight positions will generate the overnight expenses. Of course, the overnight expenses are not only paid by users, but also paid by the market for some currency pairs Say positive and negative overnight fees.
As for their algorithm, this is not a very important way. For which currency do you want to trade, just go to MT4 and check the properties of the trading varieties. There are fixed instructions for buying and selling orders, which indicate whether the overnight fee is positive or negative.
Many traders like to do positive, of course, they also need to analyze the trend of the market before they can do it. There are also a group of users who specialize in overnight interest arbitrage profit. This group of users has a large amount of capital and a relatively large trading scale, which can be used for long-term arbitrage data.
Next, let's find a foreign exchange merchant to have a look at their description of the relevant issues, such as XM foreign exchange platform:
Take the example of gold
The customer's base currency is USD
Buy a hand of gold
Long = - 2.17
As this is a buy position, the system will classify the interest rate as a long position and the current price is -2.17.
1 point size = commodity contract size * Minimum volatility price
Gold 1 point size = 100 * 0.01 = 1
Put the data into the formula, which will be 1 * (- 2.17) * 1 = - 2.17usd.
So the overnight interest on buying a lot of gold is calculated as -2.17usd.
Please note that if the base currency in the trading account is USD, the overnight interest will be calculated from USD to EUR. Overnight interest is always calculated in the second currency, and the system in the trading account will eventually be represented in the base currency.