A forex swap (rollover) is the interest charged or earned when you hold a position overnight. It comes from the interest-rate difference between the two currencies in a pair. Understanding swaps is essential — they can be a hidden cost or a small income.
What a Swap Is
Every day you hold a currency position past the rollover point, you are credited or debited a swap based on the difference between the two currencies' overnight rates.
Positive vs Negative Swap
If the currency you bought earns more interest, you may receive a positive swap; if you hold the low-yielding side, you often pay. Positions closed within the day avoid swaps entirely.
How Traders Use It
- Carry traders seek positive swaps by holding high-yield vs low-yield pairs.
- Scalpers/day traders close before rollover to avoid them.
- Swing traders budget swap into their cost calculations.
Things to Check
- Your broker's swap schedule (including triple-swap nights).
- Islamic/swap-free accounts where offered.
- Swap fees in the total trade cost.
FAQ
When are swaps charged?
At the daily rollover time; many brokers apply triple swaps on Wednesday for weekend days.
Are swaps taxable?
Treat them like interest income/expense; check your local rules.
Related: Forex Forwards and Trading Signals.
Disclaimer: Educational; confirm your broker's swap terms.