| INTEREST AND ROLLOVER POLICY Rollover Interest
Rollover refers to the process of closing open position for today's
value date and the opening of the same position for the next day's
value date at a price reflecting the difference in interest rates
between the two currencies. For instance, the primary interest rates in
Great Britain are much higher than in Japan, so if a trader buys GBP,
he/she will earn interest at 6 PM AST. on the other hand, if he/she
sells GBP in this currency pair, he/she will pay interest at 6 PM AST.
Rollover is required because, in the spot forex market, all trades
must be settled in two business days. In accordance with international
banking practices, CMS International automatically rolls over all open positions to
the next date at 6 PM AST for settlement. Rollover involves exchanging
the position being held for a position expiring the following
settlement date. For example, for trades executed on Monday, the value
date is Wednesday. The exception is a position opened and held
overnight on Wednesday. The normal value date would be Saturday;
because banks are closed on Saturday the value date is actually the
following Monday. Due to the weekend, positions held overnight on
Wednesday incur or earn an extra two days of interest. Trades with a
value date that falls on a holiday will also incur or earn additional
interest.
CMS International clients can earn interest on rollovers, depending on the
direction of their positions and interest rate differential between the
two currencies involved.
Interest on Unused Margin
Accounts with initial deposits of 10,000 USD or greater will receive
2.00% annual interest on unused margin if unused margin is over 10,000
USD. To be eligible for this interest, a trader must open at least 15
standard 100K lots per month. CMS may alter the interest terms and
schedule at its discretion.
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