Financing Turns Positions Into Clocks

Holding is not free. Many venues apply financing (swap/rollover/funding) for overnight exposure.

With leverage, small daily financing charges become meaningful. They reduce your effective expectancy and can turn a flat or slightly positive trade into a bleed.

Financing is also not always stable. In stress, funding conditions and broker policies can change, and costs can spike when you least want them to.

Process upgrade: turn this truth into a rule you can actually enforce. If the rule can’t be enforced, it will be broken under stress.

• Write the trigger condition in observable terms.
• Write the action in one sentence.
• Write the penalty for breaking it.

Enter trade → hold longer than planned → financing bleeds → become anchored → refuse to exit because ‘it’s close’ → time increases exposure to gap events → damage.

How it kills accounts:

1. The rule exists only in your head.
2. Stress arrives and you improvise.
3. Improvisation becomes inconsistency.
4. Inconsistency becomes random results.
5. Random results become a slow bleed.

Include financing in expectancy for any trade held overnight.
If carry is negative, define a maximum holding time (time stop) or require a larger edge.
Review financing terms before size, not after regret.

Rule that survives:

• Write the trigger in observable terms.
• Write the action in one sentence.
• Write the penalty for breaking it.

You hold a leveraged position for weeks because the thesis ‘should play out’. Price chops. Financing quietly drips until the trade becomes a loss without any dramatic move.

Tell: if your rule isn’t enforceable, it’s a suggestion. Suggestions don’t survive stress.

Time is not neutral

Financing is the market charging you to keep the position open.

Related: Time is a stop-loss nobody uses and Costs are a strategy.

Glossary: carry, swap/rollover, time stop, opportunity cost.

Field checklist

• Write the rule in observable terms: if X, then Y.
• Remove choices under stress. Choices become rationalizations.
• Track the precursor: what state were you in before the mistake?
• Make deviations costly (size down, pause, review).
• Turn lessons into gates, not notes.