Basics
What is Swap (overnight financing)?
By the verify.trading team · Last reviewed · How we write
A swap is the interest charged or paid for holding a leveraged position open past the daily rollover time, typically late in the New York afternoon.
Key points
- Charged on positions held past rollover.
- Depends on interest rate difference and markup.
- Longer holds cost more.
Swap (overnight financing) explained
It reflects the interest rate difference between the two currencies and the broker's markup, so it can be a cost or a credit depending on direction. Positions held over a weekend are usually charged for extra days, often on Wednesday for three days.
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