How is funding on forex positions calculated?

FX FUNDING

A tom-next rather than an interbank rate is used in the calculation of funding costs for forex.

Tom-next is the day’s market swap rate for that pair.

Example tom-next rate: -1.39/-0.39.

-0.39 would be used to calculate the funding cost on a long position.

-1.39 would be used to calculate the funding cost on a short position.

Size x (tom-next rate + admin fee)

Size means total value of lots (number of lots x value per lot)

Tom-next is the day’s market swap rate for that pair

Admin fee is no more than 0.5% per annum

Three-day funding for tom-next is charged on a Wednesday, while three-day funding for admin fees is charged on a Friday.