Overnight Fees: Swap and Rollover
When you hold a forex trade past 5:00 p.m. EST (10:00 p.m. UTC), your broker either credits or debits interest on that position. These daily financing adjustments—called swap or rollover—come from the interest rate difference between the two currencies in your pair.
What Swap Really Is
- You borrow one currency and lend the other every time you open a CFD position.
- The interest rate differential between the two central banks becomes your overnight credit or charge.
- Day traders who close before 5 p.m. EST avoid swap entirely.
Daily Processing
Brokers batch every open trade at the New York close. The financing adjustment hits your account automatically as a small profit or loss line item called "Swap" or "Rollover" on MT4/MT5 statements.
How the Math Works
Example: Long 1 Standard Lot EUR/USD
Interest Rates
ECB (EUR): 4.00%
Federal Reserve (USD): 5.25%
You pay the difference: -1.25% annually
Daily rate = -1.25% ÷ 365 = -0.0034%
Swap = $100,000 × -0.000034 ≈ -$3.40 per night
Every additional lot you hold compounds this financing cost. Swing traders must factor it into expected trade profit.
Positive Swap Opportunity
Long USD/JPY while Japanese rates are negative can actually pay you to hold the trade.
- USD rate: 5.25%
- JPY rate: -0.10%
- Net differential: +5.35% annually → roughly +$14.65 per night on 1 lot
This long-term income strategy is called the carry trade. It only works if the exchange rate moves sideways or in your favor.
Triple Swap Wednesday
Because banks are closed on Saturday and Sunday, brokers apply three days of rollover every Wednesday. Your -$3.40 nightly charge suddenly becomes roughly -$10.20. Always double-check exposure mid-week so the triple debit (or credit) doesn't surprise you.
Who Actually Pays Swap?
Short-Term Traders
- Scalpers/day traders: Typically flat before rollover → $0 swap
- News traders: Close within minutes or hours, unaffected
- Intra-day swing setups: Small charges add up if you accidentally hold overnight
Swing & Position Traders
- Holding for days/weeks means swap becomes part of transaction cost.
- Position traders with multi-month ideas must model swap into reward:risk.
- Carry traders only open positions when the swap is strongly positive.
How to Check Swap Before You Trade
MT4/MT5
Right-click the symbol → Specification → look for "Swap long" and "Swap short." Values show in points or currency per lot.
Broker Website
Regulated brokers publish daily swap tables. Bookmark the page and note that rates change whenever central banks hike or cut.
Trading Platform Columns
Add the "Swap" column to your positions/blotter view so you can see overnight debits/credits accumulate in real time.