What it is — Swap
When you hold a forex position overnight — past about 5pm New York time — your broker applies swap (also called rollover): the interest differential between the two currencies, plus or minus a broker markup.
Every currency has a central-bank interest rate attached. Buying the higher-rate currency against the lower-rate one generally earns swap; holding the reverse generally pays it. Rates are quoted per lot in your platform's symbol specification.
Why it matters — Swap
- It's a hidden cost on multi-day trades — a 3-week position can silently pay 15 nights of swap.
- Wednesday is triple swap — it books the weekend's interest in one hit.
- Carry traders chase it deliberately, earning the differential as a slow second income on top of price moves.
Swap, in dollars, from the site’s own example
Swap is rollover’s charge for keeping a position overnight: the interest differential between the two currencies, applied to your position size. Reuse the standing carry example — Australia 4.10%, Japan 0.25%, a 3.85-point gap — long one standard lot of AUD/JPY and the differential accrues roughly $7 a day at 0.70 AUDUSD, credited at the rollover; short the same pair and the same arithmetic runs against you, because swap always has two sides and the broker’s margin sits between them. Two details change the textbook number into your number: brokers add their markup (some accounts offer swap-free terms in exchange for other costs), and the differential itself moves whenever either central bank moves — the calendar’s rate decisions are also swap decisions.
Swap is a cost model, not a footnote
Three honest implications. Scalpers never pay it — intraday closes dodge rollover entirely, one quiet reason high-frequency styles suit some accounts. Swing traders pay it as rent — a 5-trade month each held four nights on negative swap can silently cost more than the spread did; check the pair’s swap lines in your platform before entry, both directions, and let the number influence which side of a neutral setup you prefer when both are valid. Carry traders live on it — the whole carry-trade thesis is swap income, which is why its risk shape (steady small credits, occasional violent FX losses) must be sized by the formula and never by the coupon’s charm. Swap is never the reason to take a trade; it is the price of still holding one at 21:00 UTC.
Frequently asked questions — Swap
What is triple swap Wednesday?
Forex settles T+2, so positions held over the weekend are charged once on Wednesday — at 3× the normal rate — to cover Saturday and Sunday. Plan exits around it if you hold swing positions midweek.
Where do I find the swap rate for a pair?
In your platform's contract specifications — every pair lists swap long and swap short per lot per night, in the quote or account currency. Brokers differ, so check yours rather than assuming the textbook differential.
Can I avoid paying swap entirely?
Close before rollover (5 p.m. New York) — intraday trades never carry overnight. Some brokers also offer swap-free accounts; read their terms carefully, as the cost usually reappears as wider spreads or admin fees.
How can I avoid paying swap?
Close before the 5pm ET rollover, trade a swap-free (Islamic) account, or select pairs/directions with positive swap for your strategy — always verifying the current specification.