Rollover (or swap) is the interest payment you earn or pay for holding a forex position past the daily market close (typically 5:00 PM EST).

How It Works

  • Based on interest rate differential between two currencies
  • Long the higher-rate currency → Earn swap
  • Long the lower-rate currency → Pay swap

Example

Long AUD/JPY (AUD rate 4.35%, JPY rate 0.1%):

  • You earn: 4.35% - 0.1% = 4.25% annually
  • Daily swap: ~$1.16 per standard lot

Short AUD/JPY:

  • You pay the swap

Triple Swap Wednesday

Forex settles T+2. Positions held on Wednesday settle through the weekend:

  • Wednesday swap = 3x normal rate
  • Accounts for Saturday and Sunday

Key Points

  • Swap can be positive (earn) or negative (pay)
  • Check your broker’s swap rates before holding overnight
  • Swap rates change with interest rate changes
  • Some brokers offer swap-free (Islamic) accounts
  • Day traders avoid swaps by closing before market close