Swap (Rollover)

Swap (rollover) is the daily financing adjustment for holding a leveraged forex position overnight, reflecting the interest-rate differential between the two currencies in the pair plus the broker’s markup. If the currency you are long pays a higher rate than the one you are short, you may receive a credit; if it pays a lower rate, you are charged. Brokers usually apply swaps once per day at a set time, and many apply roughly triple swap on one weekday to account for the weekend. Swaps can be positive or negative on the same pair depending on which side you take, and the markup means costs often outweigh credits. For day traders who close positions before the cut-off, swaps rarely apply; for swing and position traders, they are a real, recurring cost or income to factor into the plan.

In plain English — A swap, also called rollover, is the interest adjustment applied when you keep a forex position open past the daily cut-off (typically the broker’s end of trading day). Because every currency has its own interest rate, holding one currency against another means you either earn or pay the rate difference. The swap can be a small credit or a small charge, and it is applied for each night the trade stays open. Over weeks, swaps can quietly add up and matter a lot for longer-term positions.

You hold one standard lot of a pair where your bought currency has a higher interest rate than the one you sold. Each night the position is open, you may receive a small swap credit; reverse the trade and you would instead pay a swap charge.