Turkish Lira (TRY) with overwhelming high swaps! 【With LION FX, 1 lot is 115 yen, more than 40 yen cheaper than other companies ♪】 But…
Turkey's terrorism (failure) and subsequent autocratic measures by President Erdogan raise concerns, causing a sharp fall in the Turkish lira (TRY). However, viewed from another angle, it could be a buying opportunity at the bottom.
Mr. Erdogan dislikes high domestic interest rates and has frequently pressured the Turkish central bank.
As a result, while policy rates themselves have not changed, the next-day lending rate has been cut almost monthly.
Because of this, FX swap rates have continued to fall, and six months ago swapo was around 100–120 yen, but now it has dropped to around 70 yen.
...But even so, there exists a rare FX company that still maintains the high swap rate from six months ago (115 yen).
That isLION FX.
While other companies offer around 70 yen, LION FX offers a shocking 115 yen
Moreover, since May there has been no change in the amount, a surprisingly high待遇.
A swap of more than 40 yen per day; for 10 lots, that’s 400 yen more per day, and
Even with the same 1 lot of TRY/JPY, annually it’s 14,600 yen (146,000 yen for 10 lots), which is advantageous
If you hold TRY positions with other brokers besides LIONFX, you’d naturally consider moving, but
there are some concerns about the trading terms...
“Comparison of LION FX by Hirose Tusho with other brokers”
【Spread: fixed at 4.9 sen】Out of 100 points, 90 points
The strongest spread for TRY is probably in Klik365, where the spread is 3–5 sen
This is admittedly inferior, but still in a very excellent category.
【Swap points fixed at 115 yen】100 points, but 180 points
Though it says 100 points, 180 points—perhaps the author is being silly?
Still, considering actual interest rates, a swap in the 70s is normal,
If trying to outdo other companies, a bit of loss is acceptable to aim for 80–90 yen (which would be 120–130 points out of 100).
If you can maintain the position, that would be a huge loss; yet it’s fixed at 115 yen
With 10 lots, a benefit of 146,000 yen means that, conversely, LION would incur that much loss to maintain this swap.
If all Japanese investors shifted their FX TRY long positions to LION, it would clearly lead to collapse.
【Required margin and loss-cut rate】0 points out of 100
Why everyone doesn’t move to LION is because you cannot move positions when you have unrealized losses.
People don’t know about LION FX’s ultra-high swap.
…and in addition, the required margin is extraordinarily high.
TRY1000 currency = rate × amount per 1 lot × 4% (rounded up to the nearest yen)
Alternatively, 6,000 yen or the higher of the two
Margin is 4% of the amount, so with a 25x leverage, 13,600 yen is the margin
If TRY10,000 currency is 340,000 yen, divided by 25 gives a margin of 13,600 yen
But here【or the higher of 6,000 yen】becomes a problem.
With 1,000 currencies, 6,000 yen; with 10,000 currencies, 60,000 yen.
4% of the amount, at 25x leverage, 13,600 yen and 60,000 yen—the higher of the two...
Naturally the margin would always be 60,000 yen, wouldn’t it?
With 25x leverage and 60,000 yen margin, you could originally hold positions worth 1.5 million yen
However, for LION, TRY 10,000 currency requires a margin of 60,000 yen
Leverage operates at only 5.666x.
A maximum leverage below 6x in FX
With this, moving the same position size from another broker would require a large amount of additional funds.
In the first place, this level of leverage makes it difficult to hold large positions.
Moreover, with 100% margin rate, there is a loss-cut
Thus, Hirose Tsusho has built a margin system that discourages taking large positions,
while loudly promoting the unbelievably attractive swap rate of 115 yen
【But what if you actually calculate it?】
Overall, which has the best trading terms for TRY among Klik365?
Holding 100,000 currency, required margin: 136,000 yen
Assuming a fall of about 5 yen, +500,000 yen
With a swap of 75 yen, daily 750 yen; annual 273,750 yen
Margin 636,000 yen; annual swap 274,000 yen
In contrast, Hirose Tsusho’s LION FX
Holding 100,000 currency, required margin 600,000 yen
Assuming a fall of about 5 yen, +500,000 yen
Swap at 115 yen daily 1,150 yen; annual 419,750 yen
Margin 1.1 million yen; annual swap 420,000 yen
You would need about 500,000 yen more as margin, but the annual swap is nearly 150,000 yen higher
The exchange risk is the same…
So wouldn’t it be better to have only 5.666x leverage with an extra 500,000 yen margin if the annual gain increases by 150,000 yen? The drawbacks are significant, but I still feel that for buying TRY/JPY, this LIONFX is the only viable option.
※ I am currently moving away from Klik365 as well (*^^*)
Author:Nemu-GonDelivering the truth! “Former financial institution employee’s FX blog” is a site that comprehensively verifies FX information. I have 9 years of FX history and trade Nikkei 225, gold, oil, etc.
Blog:Delivering the truth! ‘Former financial institution employee’s FX blog’
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