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🔁 Understanding Swap and Rollover Fees

Why you’re charged (or paid) for holding trades overnight

Tim avatar
Written by Tim
Updated over 6 months ago

If you’ve ever opened a trade and found a small fee (or even a bonus) the next day — that’s likely a swap or rollover fee.

It’s a part of Forex trading many beginners don’t notice at first, but it can add up over time. Let’s make it easy to understand.

🔁 What Is a Swap or Rollover Fee?

A swap (also called a rollover fee) is the interest you pay or earn when you hold a trade overnight.

In Forex, you’re trading one currency against another — and each one has its own interest rate. If you hold a position past a certain time (called the rollover time, usually 5 PM New York time), your broker either:

  • Pays you interest (if you’re on the right side of the rate difference)

  • Charges you interest (if you’re on the wrong side)

📌 This happens automatically — you’ll see it as a small adjustment in your account balance.

💡 Why Do Swaps Exist?

Because you’re borrowing one currency to buy another, interest rate differences come into play.

Example, let’s say:

  • EUR interest rate = 3.0%

  • USD interest rate = 5.0%

If you buy USD and sell EUR, you're holding the higher-interest currency — you might earn a positive swap.

If you buy EUR and sell USD, you're holding the lower-interest one — you might pay a negative swap.

⏰ When Does It Apply?

  • Swaps apply only if your trade is open after 5 PM EST / 10 PM GMT

  • No swap on intraday trades (opened and closed on the same day)

  • Triple swap on Wednesdays (to account for weekends)

📌 Even though the market is closed on weekends, the interest still accrues — so Wednesday night carries triple the swap.

📊 Where Can You See the Swap Rates?

  • In your trading platform (check “specifications” or “details” of each pair)

  • On your broker’s website under contract specifications

  • Inside the trade history or “swap” column after trades are held overnight

Each broker may offer slightly different swap rates.

⚠️ Things to Keep in Mind

  • Swap fees can affect long-term trades — especially if you hold them for days or weeks

  • Islamic (swap-free) accounts are available with some brokers for religious reasons

  • Some brokers offer low or zero swaps on selected pairs for promotional periods

📌 Always know the swap before holding trades overnight — especially with large positions.

✍️ Final Tip

Swaps might seem small at first, but they can add up or eat into your profits over time. If you’re planning to hold trades for more than a day, make checking the swap part of your routine.

📌 Smart traders don’t just look at price — they look at the cost of holding the trade too.

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