Swap in forex is the interest you pay or earn for keeping a trade open overnight, also called rollover. It comes from the difference between the interest rates of the two currencies, plus your broker's own fee, and it's charged on the full position, not on your margin. A trade closed before the daily rollover pays no swap, and many brokers charge three days at once on one night of the week.
Below we cover where swap comes from, why it can be negative in both directions, how to calculate it, the triple swap day, and what it means for trades held for days, including those of expert advisors (EAs). The swap values and interest rates here are invented, because real ones change. Check your own in MetaTrader.
What Is Swap in Forex?
When you trade a pair, you are in effect holding one currency and owing the other. In a BUY of EUR/USD, you hold euros and owe dollars. In spot forex a trade would settle in a couple of days, so a broker rolls an open position forward at the end of each trading day. Interest for that extra time is what appears on your account as swap.
In practice it's a line in MetaTrader: the Trade tab of the Terminal window has a Swap column, which shows the running total for each open trade.
The name can be confusing. An FX swap in the interbank market is a separate instrument: two parties exchange currencies now and agree to reverse the exchange later. A cross-currency swap is another contract again. Neither is what you see on your trading account. In retail forex, swap just means the overnight charge or credit.
Where the Number Comes From
Take 0.10 lot of EUR/USD at 1.0850, which is 10,000 euros or $10,850. Say the euro interest rate is 2% and the dollar rate is 4% (invented figures). The gap is 2% a year on the full position:
$10,850 × 2% ÷ 360 = about $0.60 a night
The side that holds the higher-rate currency would receive this, and the other side would pay it. That's the theory. In practice your broker adds a fee to both sides, so you pay more or receive less. For example:
| Position | Rate difference | Broker fee | Your swap |
|---|---|---|---|
| BUY (long) | −$0.60 | −$0.20 | −$0.80 |
| SELL (short) | +$0.60 | −$0.20 | +$0.40 |
Note that the amount is based on the $10,850, not on the margin. At 1:100 leverage the margin is only about $108.50, but swap ignores that: leverage doesn't make the interest smaller.
Positive and Negative Swap
Swap long and swap short are separate numbers, and they're rarely mirror images:
- Negative: you pay. This is the more common case.
- Positive: you receive a credit. This can happen when you hold the higher-rate currency and the gap is larger than the broker's fee.
- Negative both ways: when the rates of the two currencies are close, the broker's fee can make both directions a cost.
Swap also changes over time, because interest rates change and brokers update their values. A positive swap today can turn negative later, and two brokers can show different values for the same pair.
How to Find Your Swap in MetaTrader
In MT4, right-click the pair in Market Watch and choose Specification. Three lines matter:
| Line | What it means |
|---|---|
| Swap type | How it is counted: in points, in money or in percent |
| Swap long | What a BUY pays or earns |
| Swap short | What a SELL pays or earns |
Your broker's website usually lists the same values, along with the triple swap day.
How to Calculate Swap
On most forex accounts the swap type is points, and the sum is:
Swap = lots × contract size × point size × swap in points × nights
On EUR/USD the contract is 100,000 and a point is 0.00001. So with a swap long of −8.0 and a swap short of +4.0 at 0.10 lot:
| Held for | BUY 0.10 lot | SELL 0.10 lot |
|---|---|---|
| 1 night | −$0.80 | +$0.40 |
| Triple swap night | −$2.40 | +$1.20 |
| 1 week | −$5.60 | +$2.80 |
| 30 days | −$24 | +$12 |
Be careful with units: 8 points is 0.8 pips, not 8 pips. If your account is in another currency, or the pair's quote currency isn't USD, MetaTrader converts the result. Other swap types use a different sum, so check your broker's description.
The Triple Swap Day
Swap is charged once a day, at the broker's rollover time. That's often around 17:00 New York time, which many MT4 servers show as midnight. There is no rollover at the weekend, but interest still runs. So brokers charge for Saturday and Sunday on one weekday, three days at once.
For forex this is often the night from Wednesday to Thursday, because of how spot trades settle. It isn't the same everywhere, and some instruments use a different day, so check your broker's table. If you count by calendar nights, as in the 30-day row above, the triple day evens out.
What Swap Means for Your Trades
For a trade closed within the day, swap doesn't matter at all. It only applies if the position is open at rollover, however long it's been open. For longer trades it's worth checking. In our example, holding a BUY for 30 days costs $24, more than a planned loss of $20 on a 20-pip stop at the same size.
Expert advisors deserve a closer look. A grid or averaging EA can hold a large position for weeks while it waits for a recovery. Take 0.50 lot held for 20 nights at −8.0 points: that's −$4 a night, or −$80 in total, and it comes on top of the floating loss. Before you judge a record, check how much swap it paid, and whether your broker's swap would be similar. See How to Choose the Best Forex Robot.
Locking a position with an opposite trade doesn't stop swap either. With the values above, a BUY and a SELL of the same size pay −$0.80 and receive +$0.40, a net cost of $0.40 a night. See Hedging in Forex.
Can You Earn From Swap? The Carry Trade
A carry trade means holding a higher-rate currency against a lower-rate one to collect a positive swap. It sounds easy, but the price risk is much larger than the income. At +4.0 points on 0.10 lot, you earn $12 in 30 days, so a 12-pip move against you cancels a month of swap. A full year earns $146, which equals a move of just 146 pips.
Carry trades also tend to go wrong all at once. The Bank for International Settlements described how FX carry trades were hit hard in the market turbulence of August 2024, as leveraged positions were cut in thin markets (BIS Bulletin 90). So a positive swap is a small bonus at best, not a reason to hold a trade.
“Swap arbitrage” between two brokers has its own costs and risks: two spreads, two sets of margin, swap values that can change, and the chance that a broker's terms forbid it. It isn't free money.
How to Reduce Swap Costs
- Close before rollover, if the trade was meant for the day anyway. But check the sum: reopening costs another spread. In our example, 1.2 pips on 0.10 lot is $1.20, which is more than the $0.80 swap for a night. Spreads can also be wider around rollover, so avoid closing at the last minute.
- Know the triple day, and don't be surprised by it.
- Compare brokers on swap if you hold trades for days. It's a cost, like the spread.
- Include it in your plan. For long-term trades, add the expected swap to the cost of the trade. Our risk management guide shows how a trade is planned.
Swap-free accounts, often called Islamic accounts, are meant for traders who can't pay or receive interest for religious reasons. They aren't always free: a broker may charge a fixed fee instead, or use different spreads or holding limits. Read the terms before you pick one.
FAQ
What does swap mean in forex?
Swap, or rollover, is the interest you pay or earn for keeping a position open overnight. It comes from the difference between the two currencies' interest rates, plus a broker's fee, and it's calculated on the full position size.
How do you calculate swap in forex?
When swap is set in points, multiply lots by contract size, by point size, by the swap in points and by the number of nights. For 0.10 lot of EUR/USD at −8.0 points, that's 0.10 × 100,000 × 0.00001 × 8 = $0.80 a night.
Why is swap charged three times on one day?
There's no rollover at the weekend, but interest still runs, so brokers charge for Saturday and Sunday on one weekday. For forex this is often Wednesday night, but some brokers and instruments use another day. Check the swap table of your broker.
Why are both swap long and swap short negative?
Because your broker adds a fee to both sides. If the two interest rates are close, the fee can be larger than the rate difference, and then both directions cost money.
Can you avoid swap in forex?
Yes, by closing your trades before the daily rollover, since swap applies only to positions open at that moment. Swap-free accounts also exist, but they can have other fees. Check that closing and reopening doesn't cost more than the swap itself.
The Bottom Line
- Swap is the overnight interest on the full position, not on your margin.
- It comes from the rate difference plus the broker's fee, so it can be negative both ways.
- In points mode: lots × contract size × point size × swap points × nights.
- Weekend days are usually charged on one weekday, often Wednesday night.
- Check it for trades and EAs that hold for days, and treat a positive swap as a bonus, not a strategy.
Next, see how rates move prices in Fundamental Analysis in Forex, or read how leverage and margin work.
This article is educational and is not investment advice. The swap values and interest rates are illustrative. Trading leveraged products involves risk of loss.
