Triple swap

A swap (overnight financing or rollover) is applied to positions held past the daily cut-off, typically 5pm New York time. Markets are closed at the weekend, but interest still accrues for Saturday and Sunday, so brokers apply three days' worth of swap on one night of the week.

For spot forex this is usually Wednesday night. Spot currency trades conventionally settle two business days after the trade date, so a position rolled from Wednesday to Thursday has its value date moved from Friday to Monday, spanning the weekend. For some CFDs on indices, commodities or shares, the triple charge falls on Friday instead. The day is shown in each instrument's specification.

Example

Illustrative figures: holding one standard lot of a pair long carries a swap of −$6 a night.

• Monday, Tuesday nights: −$6 each
• Wednesday night: −$18
• Thursday night: −$6
• Held Monday to the following Monday (five rollovers): −$42, or seven days' financing

If you open the position on Wednesday afternoon and close it on Thursday morning, you pay −$18 for holding one night. If the swap on your side is positive, you receive three times the amount instead.

Practical notes

• Swaps can be negative on both sides. Brokers add a markup to the interest rate differential, so long and short can both cost money.
• Rates change. Swap rates move with central bank rates and broker pricing; check the current figures on the platform rather than relying on past values.
• Islamic accounts. A swap-free account replaces swaps with other fees, which may also be charged on a particular day.

Our guide to swap and overnight financing explains how swaps are calculated, and hidden broker fees covers other holding costs.