Understanding Overnight Swap Fees

When you hold a trading position overnight, you may incur swap fees (also known as rollover fees). These fees are charged by brokers for extending the settlement period of your trade.

What Are Swap Fees?

Swap fees are interest payments that traders either pay or receive when holding positions past the daily market close (typically 5 PM EST). The fee depends on:

• Interest rate differential between the two currencies in a pair
• Position direction (long or short)
• Lot size of your position

How Swap Fees Work

• Positive Swap: You receive interest when the currency you’re buying has a higher interest rate than the currency you’re selling
• Negative Swap: You pay interest when the currency you’re buying has a lower interest rate than the currency you’re selling

Triple Swap Wednesday

Most forex brokers charge triple swap fees on Wednesday to account for the weekend settlement. This means if you hold a position over Wednesday night, you’ll pay or receive three times the normal swap fee.

Managing Swap Costs

1. Day Trading: Close positions before the daily cutoff to avoid swap fees
2. Swap-Free Accounts: Some brokers offer Islamic accounts without swap fees
3. Positive Swap Trading: Look for currency pairs where you can earn swap (carry trade)

Recommended Broker: UZFX offers competitive swap rates and Islamic account options for eligible traders.

Risk Warning

Trading forex and CFDs involves significant risk and may not be suitable for all investors. Past performance is not indicative of future results. Please ensure you understand the risks involved and seek independent advice if necessary.