What is an overnight position
An overnight position is a trade that is still open when the market's daily rollover passes, so it carries over into the next trading day.
A trade opened and closed within the same trading day is an intraday trade. Once the position stays open past rollover, it becomes an overnight trade. In forex and CFD trading this usually means a swap is applied. A swap is an interest adjustment that can be charged to the account or credited to it.
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Formal definition and how swap works
In spot forex, settlement takes place a short time after the trade date. A broker does not deliver the currencies. At rollover it rolls an open position forward to the next value date instead. The cost or credit of this roll reflects the interest rate difference between the two currencies in the pair. For more on this mechanism, see forward points and covered interest parity.
Key points for experienced traders:
- Rollover time is set by the broker, often at the close of the New York session. Check the time in your platform's contract specification.
- Swap long and swap short are listed separately. They can differ, and both can be negative.
- Weekend roll. On one weekday, the swap usually covers the weekend days as well, so that day's charge is larger.
- Timing edge case. Swap depends on whether the position is open at the rollover moment, not on how long it was held. A trade opened a minute before rollover gets swap. A trade held for hours and closed before rollover does not.
- Futures-based CFDs may have no swap but a contract roll or adjustment instead. See futures roll.
- Swap-free accounts replace swap with other terms. See Islamic finance.
- Banking meaning. In banking regulation, "overnight open position" means a bank's net foreign currency exposure at the end of the day, which is subject to limits.
Worked example (hypothetical)
A trader opens a buy position on EUR/USD in the afternoon and keeps it open past rollover.
- The platform's contract specification shows the swap long value, in points.
- The swap is roughly: swap long points × value of one point per lot × number of lots.
- If swap long is negative, that amount is deducted at rollover. If it is positive, it is credited.
- If the position stays open across the weekend-roll day, the amount is multiplied for the extra days.
To put real figures on this, use the swap tool on the Calculators page and read Swap fees.
Leveraged forex and CFD positions can lose money fast. Holding overnight adds swap costs and exposure to price gaps when markets reopen. See Risk management and Exposure.
Where the term appears
- Platforms. In MetaTrader 5 and MetaTrader 4, the Trade and History tabs have a "Swap" column for each position.
- Reports. Your account statement shows swap per trade and in total.
- News. Reports mention "overnight positions" when traders cut exposure before weekends or central bank decisions, or when brokers change margin rules.
Related terms
Frequent questions
What is an overnight position in simple words?
It is a trade that is still open when the daily rollover passes, so it carries into the next trading day.
Are swap overnight charges always a cost?
No. Depending on the interest rate difference and the broker's terms, swap can be a charge or a credit. Check the swap long and swap short values in the contract specification.
Does closing before rollover avoid swap?
Yes. Swap applies only to positions that are open at the rollover moment.
Why is the swap larger on one day of the week?
On that day the roll also covers the weekend days, so the charge or credit is multiplied.
Do all instruments have swap?
No. Some futures-based CFDs use contract rolls instead, and swap-free accounts follow other terms. Check the instrument's specification.