Swaps, also known as rollovers, is the interest adjustment applied when holding a trade position overnight.
Depending on the instrument and market conditions, a trader may either pay or receive swaps on their open positions.
In Forex and CFD trading, swaps can have a meaningful impact on overall trading costs and profitability, particularly for positions held over multiple days.
There are two types of swap charges:
- Swap Long – applied when holding a buy position overnight.
- Swap Short – applied when holding a sell position overnight.
Swap rates are typically expressed in pips or points depending on the instrument being traded. The applicable rate varies by product and market conditions and can be viewed within the contract specifications for each symbol on the trading platform.
- A negative swap means the amount will be deducted from the trader’s account.
- A positive swap means the trader will receive a credit to their account.
Important Swap Calculation Rules
Certain instruments apply a triple swap (or rollover) charge on specific days to account for weekend settlement adjustments:
Forex pairs & metals:
- Triple swap is applied when positions are rolled from Wednesday to Thursday (to cover the weekend settlement gap).
USD/CAD, USD/TRY, and EUR/TRY:
- Triple swap is applied when positions are rolled from Thursday to Friday, due to their specific settlement conventions.
CFDs:
- Triple swap is typically applied when positions are rolled from Friday to Monday.
Examples of Swap calculation for different instruments
For Currency Pairs:
- Currency Pair: EUR/USD
- Number of lots: 1 lot
- Pip cost per lot: $10 (typical for standard lot on EUR/USD)
- Swap rate: -1.5 (negative means you're paying swap)
- Number of nights: 3
- The Swap will be calculated like this = 1 lot × $10 × (-1.5) × 3 nights = -45
For cryptocurrencies:
SWAP for Cryptocurrency = (Contract × V (lots)× Price) × Percentage / 100 / DaysPerYear Contract — size of 1 lot
- V (lots) — volume in lots
- Price — current market price
- Percentage — annual percentage
- DaysPerYear — number of days in a year.
- Example calculation of swap for a short position with a volume of 0.1 lots on BTCUSD:
SWAP Short = (1× 0.1 × 57000) × -19 / 100 / 360 = -3.01 USD.
