Who Really Benefits from Swaps, the Broker or the Trader?

[ituglobal]

It’s known that the broker makes money from spreads and/or commissions on their clients’ trading activities, but what about swaps? I’ve seen that swaps are sometimes positive or negative, having positive or negative effects on the trader’s portfolios. But… who really benefits, or get affected by swaps, the trader, the broker or the liquidity provider? An answer would be appreciated.

 

[Enivid]

Brokers benefit from swaps. Traders who are aware of swaps and learn to use them to their advantage also benefit from them. They all gain from the loss incurred by the traders who pay negative interest rates.

 

[bablogfx]

It’s known that the broker makes money from spreads and/or commissions on their clients’ trading activities, but what about swaps? I’ve seen that swaps are sometimes positive or negative, having positive or negative effects on the trader’s portfolios. But… who really benefits, or get affected by swaps, the trader, the broker or the liquidity provider? An answer would be appreciated.

Swaps are paid to liquidity providers. It is set on government level (read fiscal policy) Brokers can benefit only to swap markups, but it is usually not so much as high markup can affect their reputation negatively...

 

[vicknic]

Brokers benefits from Swap in one way, and that is transferring charges to the clients. In this way, the broker will not pay the interest for an overnight open position, but the trader does. Also, for positive interest, the trader benefits from this because it is credited to his account. In the situation where a trader uses an Islamic account, the traders benefits fully because he is not charged for overnight positions.

 

[Exness Support]

I think both make money in this occasion. When the swap is positive then trader benefits and when the swap is negative then broker benefits. But as a matter of fact many things depend on central bank interest rate of the currency and the pairing of the currency where to hold a position even broker have to pay some fee. At the end of the day if your trading is profitable then i think you shouldn't bother too much about the Swaps.