Investopedia

Continue to Site »

Rollover Debit

Filed Under » ,
Dictionary Says

Definition of 'Rollover Debit'

In foreign exchange trading, a loss caused by an unfavorable difference in daily interest rates between the currencies being traded. Essentially, a trader earns interest on the currency that has been loaned out, and pays interest on the currency that has been borrowed. If the interest earned on the loaned currency is lower than the interest paid on the borrowed currency, the trader will have a rollover debit.
Investopedia Says

Investopedia explains 'Rollover Debit'

Suppose a trader has borrowed 100,000 euros and loaned U.S. dollars (100,000 EUR/USD). Suppose also that the short term interest rate on euros is 3% and the rate on U.S. dollars is 2%. In this case, our trader is paying interest at 3% per annum on the borrowed euros, and only earning 2% per annum on the loaned U.S. dollars.

Articles Of Interest

  1.

    Getting Started In Foreign Exchange Futures

    Learn how these futures are used for hedging and speculating, and how they are different from traditional futures.

  2. Currency Exchange: Floating Rate Vs. Fixed Rate

    Baffled by exchange rates? Wonder why some currencies fluctuate while others are pegged? This article has the answers.

  3. Forex: Wading Into The Currency Market

    We go over the ground rules and available resources needed for this undertaking.

  4. Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.

  5. The Foreign Exchange Interbank Market

    Can your forex broker offer you the most competitive pricing? Learn how the market's biggest players affect you.

  6. Predict Inflation With The Producer Price Index

    Find out how the PPI can be used to gauge the overall health of the economy.

  7. Trade Forex On Herd Instinct

    Use caution and commonsense when making trades according to herd instinct – use stop losses, avoid complacency and plan your exit strategy.

  8. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.

  9. Trading Forex Trends With MACD And Moving Averages

    Although based on short-term trading, keeping the long-term picture in mind will help investors trade with the trend.

  10. Trading The Non-Farm Payroll Report

    Discover how to trade the NFP report without getting knocked out by the irrational volatility it can create.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  2. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  3. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  4. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.

  5. Consequential Loss

    The amount of loss incurred as a result of being unable to use business property or equipment.

  6. Lease To Own

    An arrangement where an individual enters into a lease agreement with an owner with the inclusion of a clause that typically gives the individual the right, but not the obligation, to purchase the item leased at a predefined price and time.
Trading Center