What Is Swap (Rollover)? The Cost of Holding Overnight

A swap, or rollover fee, is a charge (or credit) applied to a position that’s still open when the trading day rolls over, reflecting the interest rate difference between the two currencies in the pair.

Why it exists

Forex trading effectively involves borrowing one currency to buy another. Since different countries set different interest rates, holding a position overnight involves an interest rate differential — this gets passed on to you as the swap.

Positive vs. negative swap

If you’re long the currency with the higher interest rate, you may receive a small credit. If you’re long the currency with the lower interest rate, you’ll typically pay a small fee. The direction depends on both the pair and whether you’re long or short.

Wednesday’s triple swap

Most brokers charge triple the normal swap on Wednesdays to account for weekends, since the forex market is closed on Saturday and Sunday but interest still technically accrues over those two extra days.

Why it matters for your strategy

Swap is usually small per day but can add up meaningfully for positions held for weeks or months — something long-term or “carry trade” strategies factor in deliberately, while short-term traders often don’t need to worry about it much.

Key takeaway

Swap is a real, if often small, cost (or occasional benefit) of holding leveraged positions overnight. Check your broker’s specific swap rates for the pairs you trade if you plan to hold positions for more than a day or two.