What Is Swap (Rollover) in Forex? How to Calculate It
Holding a forex position overnight has a cost or a credit. The swap is the interest rate differential between the two currencies in the pair.
When you hold a forex position open past the daily rollover time (typically 22:00 UTC), your broker applies a swap — also called rollover or overnight financing. It can be a charge or a credit depending on the pair and direction.
Why swap exists
When you trade EUR/USD, you are effectively borrowing one currency to buy another. Borrowing carries an interest rate. The swap reflects the difference between the interest rate of the currency you are selling and the one you are buying.
If you buy a currency with a higher interest rate than the one you sell: you receive a positive swap (credit).
If you buy a currency with a lower interest rate: you pay a negative swap (charge).
Triple swap on Wednesdays
The forex market is closed on weekends, but swap still applies for Saturday and Sunday. To account for this, brokers apply three days of swap on the Wednesday rollover — making Wednesday the most swap-intensive night of the week for open positions.
How to check swap rates
Every broker publishes swap rates per lot per night for each pair. You can find them in the trading platform: in MetaTrader 4 and 5, right-click the pair in Market Watch and select Specification.
Swap rates are quoted in pips or in the account currency per lot. They change periodically as central bank rates change.
When swap matters
Day traders and scalpers: almost never hold past rollover. Swap is irrelevant.
Swing traders: holding 3–7 days, swap is a minor but real cost. On some pairs it significantly affects the net result.
Position traders: holding weeks or months. Swap becomes a meaningful part of the return calculation. Positive swap on a long-running position can generate meaningful income; negative swap erodes it.
Carry trade strategy
The carry trade is built entirely around swap. A trader buys a high-interest-rate currency against a low-interest-rate currency, collecting positive swap each night. The strategy works when the exchange rate remains stable or moves in the trade's favour — and loses when adverse currency movement exceeds the accumulated swap income.
Swap-free (Islamic) accounts
Islamic accounts, also called swap-free accounts, eliminate overnight interest to comply with Islamic finance principles. Some brokers offer these to all clients; others restrict them to Muslim traders. Administrative fees may replace the swap in some implementations.
Frequently Asked Questions
How much is a typical swap charge?
It varies widely by pair and broker. On EUR/USD, swap for a long position might be around −$5 to −$7 per standard lot per night. On pairs with large interest rate differentials (e.g., USD/TRY), swap can be much larger in both directions.
Can swap be positive?
Yes. If you are on the right side of the interest rate differential — buying a high-yield currency — you receive a credit each night. Some traders specifically seek pairs with positive carry.
Does swap apply on demo accounts?
Usually yes, if the demo replicates live conditions. Check your broker's demo settings.
How do I calculate swap before opening a trade?
Swap (per night) = (lot size × swap rate) ÷ 10. For specific amounts, use your broker's swap calculator or the Specification window in MetaTrader.
Is swap the same as commission?
No. Commission is a flat fee paid at entry and exit. Swap is an ongoing overnight charge or credit for each night a position is held open.
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Not financial advice. This article is educational. Trading carries substantial risk and you can lose more than your deposit. See our risk disclaimer.
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