What is Rollover Interest Rate?

Interest rollover rates are part of forex trading; there will be a daily rollover interest rate that a Forex trader either pays or earns for every position open at the broker's "cut-off time" usually 5pm EST, depending on the closing time of the market. Interest is paid on the currency that is borrowed, and earned on the one that is bought.

If the Forex trader does not want to earn or pay interest on his/her positions, he/she must ensure that these positions are all closed before 5pm EST, the established end of the market day.

If a Forex trader bought a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive. In this case, the Forex trader will earn funds as a result. Hence, it is important to find out from the broker or dealer about specific details regarding rollover interest to maximize earnings or minimize losses.