In the aftermath of the pandemic, interest rates rose sharply making the differential in foreign exchange (FX) pairs more expensive than ever before. The biggest struggle for traders, however, remains the question of how best to manage FX swap costs, which is a challenging and often underestimated process. The answer comes in the shape of CYBMIND, our investment strategy automation software with integrated Spotfire® Streaming modules that has been built to automatically monitor, trade, and manage such costs.
Why Managing FX Swap Costs Can Be Tricky
At the time of writing, the USD/JPY short position swap is hovering around the 5.9% per annum mark, but this changes practically every night. This means that if you are trading with leverage, the impact on your P&L and position margins could be extremely costly.
Yet this is just one FX pair, so things get even more complicated when you’re managing multiple positions in multiple currencies. And that’s not mentioning that you may be hedging on some positions to reduce your net exposure to the market or leveraging on others, which increases your risks.
In other words, to manage FX swap costs is to keep your overall costs under control, and you can do that with our investment strategy automation software, CYBMIND.
Why CYBMIND, With Integrated Spotfire®, Helps You Manage FX Swap Costs
CYBMIND is our investment strategy automation software that lets you automate financial, investment, and hedging processes. We’ve built it ourselves from the ground-up, but we’ve also integrated Spotfire® into it, making it possible for investors, particularly those working for SMEs, to manage multiple independent positions per symbol.
Indeed, CYBMIND monitors the P&L of each single position, as well as the aggregated net P&L in real-time.
It also does the same for swap costs, a function that can be applied at symbol- and individual position-level. This can help you curb those overnight swap costs, which are often out early enough for you to rebalance your FX exposure, but which are usually too complex for human beings to compute in time.
Most importantly, CYBMIND with Spotfire® lets you monitor four levels of swap costs:
- FX Symbol swap costs that are equivalent to the net size for all the position exposures on each symbol you trade;
- Nominal single-position FX swap costs that are calculated assuming the position is not hedged by other positions on the same symbol;
- Net single position FX swap cost, which is the FX swap cost reduced from the nominal due to the effect of other positions; and
- The FX swap cost for each position after any additional position has been generated with the purpose of reducing the swap costs.
All these costs can be monitored intraday and before the rolling time, making it possible to manage the impact in your trading return, maximise the positive returns, and reduce the negatives.
The Main Benefits of Spotfire® to Automate FX Swap Trading
One question we’re often asked is why we decided to integrate Spotfire® into CYBMIND. The answer, of course, is to give it the power to do all that’s mentioned above, but that’s only the beginning.
Through Spotfire®, CYBMIND can do more than just monitor your FX swap costs: it can also remove the need for you to manually place orders when adjusting your FX swap cost strategy. Instead, you can sit back and let the coded automated strategies check the FX swap rates from the providers in advance before automatically generating and placing orders according to your rules - day or night!
Improve Your Real-Time Trading Through Spotfire® Streaming in CYBMIND
Yes, this software is really that powerful and, yes, it can really improve your experience of manually trading, monitoring, and adjusting FX swap costs.
Moreover, thanks to multiple modules developed in Spotfire Streaming®, this software allows our customers, which are mostly financial SMEs, to have access to the same powerful tools used by large banks and multinational corporations.
So, what are you waiting for? Get in touch with us to discover how our software can help you improve your FX swap cost management and improve your trading.