Watch for changes to swap rates and margins over the Christmas period

The extended holiday period over Christmas is the most illiquid time of the year. That can mean the costs of funding currencies can rise. This naturally feeds down the ladder to us retail traders. IG have already announced that they have seen funding costs rising, particularly vs USD and so will be making changes from the 26th Dec.

Funding rates for FX pairs can be extremely volatile, resulting in your daily funding adjustments being much higher than normal. To the best of our knowledge this will affect JPY crosses held past 10pm on the 26th December, CAD crosses and USDTRY positions held past 10pm on the 28th December, and most other pairs including gold and silver held past 10pm on the 27th December.

The changes may not be huge but there is the possibility of FX funding volatility so it’s something to be aware of. It would be wise to double check with your broker for any changes to funding and margins over this time.

Personally, unless I’m in a long-term trade, I usually clear the books into this period.

If you have any notices from your broker, fell free to let us know and I’ll update the post for others.

H/T to Stefan in our trading room for the notice.

Update: CMC NA (Canada) have listed some general margin changes for equities and commods effective 23rd Dec here.

Ryan Littlestone

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