A forex swap rate or rollover is defined as the overnight interest added or deducted for holding a position open overnight, this can be earned or paid. Swap/Rollover rates are determined by the overnight interest rate differential between the two currencies involved in the pair and whether the position is a buy ‘long’ or sell ‘short’.
What you should know about swap rates
- Swaps are applied to your trading account only when positions kept are kept open until the next forex trading day.
- Swaps are applied when the rollover occurs at the end of day, which is 00:00 server time.
- Some currency pairs may have negative swap rates on both sides, both ‘long’ and ‘short’.
- Swap rates are calculated in points, MetaTrader 4 converts them automatically into the base currency of the account.
- Each currency pair has its own swap charge and is measured on a standard size of 1.0 standard lots (100,000 base units).
- Swaps are calculated and applied on every trading night. On Wednesday night swaps are charged at triple rate the usual rate.