Where it comes from
Holding a currency pair means holding one currency and owing the other. The two pay different interest rates, and the difference is settled daily. If the currency you hold pays more than the one you owe, swap can be positive; the other way round it is a cost. Broker markup usually makes both sides worse than the raw difference.
When it is charged
At the daily rollover, 17:00 New York time. A position opened and closed inside the same trading day pays no swap at all. A position held for a minute across the rollover pays a full day.
Triple swap Wednesday
Currency trades settle two business days forward, so the position held through Wednesday’s rollover covers the weekend as well. Most brokers charge three days at once on Wednesday night. On some instruments the triple day is Friday; your broker publishes which.
When it matters
It is close to irrelevant for a day trader and can be the largest single cost for a swing trader. A position held for three weeks pays swap around twenty times; on a high interest differential that can exceed the spread many times over.
In short
| What it is | Overnight financing on a leveraged position |
|---|---|
| Charged at | 17:00 New York time |
| Triple day | Usually Wednesday |
| Intraday trades | Pay none |
Common questions
Can swap be positive?
Yes, when the currency you are long pays more interest than the one you are short. Brokers add a markup to both directions, so a positive swap is smaller than the raw rate difference and can be zero even when the rates suggest otherwise.
What is a swap-free account?
An account, usually offered for religious reasons, where swap is not charged. Brokers commonly replace it with a fixed administration fee after a number of days, so it is worth reading what the alternative charge is.
How do I avoid swap entirely?
Close before 17:00 New York time. That is the only reliable way, and it is why the rollover time is worth knowing in your own time zone.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.