Glossary
Swap
The interest charged or earned for holding a forex position open overnight.
Swap, explained
A swap (or rollover) is the interest adjustment applied when you keep a position open past the broker's daily cut-off (typically 5pm New York time). Because every forex trade involves borrowing one currency to buy another, you pay or receive the interest-rate difference between them.
The swap can be positive (you earn) or negative (you pay) depending on the pair's direction and rate differential. If you are long the higher-yielding currency you may receive a credit; long the lower-yielding one, you pay. Most retail swaps are net negative once the broker's markup is included.
Triple swap is usually charged on Wednesday to account for the weekend's settlement — three days' worth of rollover booked in one go — so a position carried over Wednesday night incurs an outsized adjustment. Some brokers shift this day, so it is worth checking your platform's swap schedule.
Swaps are negligible for intraday traders, who close before the cut-off, but meaningful for swing and position traders holding for days or weeks, where they quietly add up. Carry traders deliberately seek positive-swap positions, aiming to earn the rate differential as a return on top of any price move.
On the desk swap rarely affects short-term setups, but we flag it on longer holds, because a negative swap on a multi-day position can erode a chunk of a modest target. For anything held over Wednesday it is worth a glance before committing.
Frequently asked questions
- When is swap charged?
- At the broker's daily rollover cut-off, usually 5pm New York time, on any position still open. It is not charged on trades you open and close within the same day before the cut-off.
- Why is swap tripled on Wednesday?
- Spot forex settles two business days forward. Holding over Wednesday night covers the weekend's settlement, so brokers book three days of swap at once. Some brokers apply this on a different day.
Related terms
Spread
The gap between the bid and ask price — the built-in cost of opening a trade.
ReadBalance
The settled cash in your account — the total of all closed (realised) profits and losses.
ReadCurrency Pair
Two currencies quoted against each other — the base currency priced in terms of the quote currency.
ReadLeverage
Borrowed buying power that lets you control a large position with a small deposit — and that magnifies both gains and losses.
Read
Put it into practice
Education modules
More terms in the glossary.
Vocabulary is the easy part. See how the desk turns these concepts into structured trades with defined risk on every position.