Swap meaning in plain words
A swap is an amount added to or taken from your account when you keep a leveraged position open past the end of the trading day. Traders also call it the overnight fee, rollover fee or financing charge.
If you open and close a trade within the same trading day, no swap applies. If the position is still open at the daily cut-off, the platform applies the swap for that night. It shows in the "Swap" column of your open position in MetaTrader and changes your floating profit or loss.
A swap can be:
- negative, meaning you pay it, or
- positive, meaning it is credited to you.
In practice, broker markups mean that on many instruments both directions are negative.
Why swaps exist: the interest differential
In forex, every trade involves two currencies. When you buy a pair, you hold the base currency and are effectively short the quote currency. Each currency has an interest rate set mainly by its central bank's policy rate.
Holding a currency with a higher interest rate against one with a lower rate creates a difference in interest. This is called the interest rate differential. The swap passes that differential on to you, adjusted by the broker.
Central bank decisions change these rates over time. For example, the State Bank of Pakistan's latest decision: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). When a central bank moves its rate, swaps on pairs that include that currency usually change too. See SBP rates and economy for more on policy rates.
For CFDs on indices, metals, energies and crypto, the swap works as a financing charge on the position's value. It is based on a reference interest rate plus a markup, and in some cases a cost of carry.
Interest differential plus broker markup
A swap is not just the market interest differential. The broker adds a markup, or administrative fee, to both sides:
| Component | What it is |
|---|---|
| Interest differential | Difference between the rates of the two currencies, or the financing rate for a CFD |
| Broker markup | A fee the broker adds, which lowers the long and short swap |
| Result | The swap rate published for each instrument, long and short separately |
Because of the markup, the long swap and short swap are not mirror images. Even when the differential favours one side, the markup can turn that side's swap negative. For how this fits with spread and commission, see Total trading costs and Swap fees.
Long vs short: why the sign differs
Whether you pay or receive depends on the direction of your trade. Direction is explained in Long and short.
- Long (buy): you earn the base currency's rate and pay the quote currency's rate. If the base currency's rate is higher, the long swap can be positive before the markup.
- Short (sell): the opposite applies. You earn the quote currency's rate and pay the base currency's rate.
Each instrument therefore has two published values: swap long and swap short. Always read the value for the direction you trade.
When swap is charged: rollover time
Swap is applied at rollover. This is the moment the trading day changes on the broker's trading server. It is usually tied to the end of the New York session. The exact time depends on the broker's server time, so check it in the platform or in the broker's terms. Rollover covers the mechanics.
Points to know:
- A position opened just before rollover and still open after it is charged the swap.
- Swap is applied once per rollover, not per hour.
- During rollover, spreads often widen and liquidity is thin. This affects stop orders placed near the price.
Triple swap day
Spot forex trades settle a few business days after the trade date. A position held over a particular midweek rollover is therefore treated as spanning the weekend. On that night, the swap for the weekend days is charged in one go. This is known as the triple swap.
For most currency pairs this happens on Wednesday. Some CFDs, such as indices or energies, apply their extra charge on a different weekday, often Friday. Holidays can add extra days as well. Details are on Triple swap day and Weekends and holidays.
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How swap is calculated
Brokers publish swap rates in one of these forms:
- In points. The swap is a number of points per lot per night. This is the most common form in MetaTrader.
- As a percentage. An annual rate is applied to the position's value and divided by the days in the year.
- In money. A fixed amount per lot in the account currency.
For swap in points, the formula is:
Swap in money = lots × swap rate in points × value of one point per lot × number of nights
The value of one point depends on the instrument's contract size and the exchange rate to your account currency. If points and lots are new to you, read What is a pip, Pips, points, pipettes and What is a lot.
Swap calculator
Use the calculator to turn the swap points shown in the platform into money for your position.
Fill in the empty fields to see the result.
Swap = points × point size × contract size × lots, per night; negative means you pay. Swap values are set by the broker and change.
To get a result, enter:
- the instrument, for example XAUUSD or a currency pair,
- the direction, long or short,
- the position size in lots,
- the swap rate in points for that direction, copied from the instrument's specification in MetaTrader,
- your account currency,
- the number of nights you plan to hold, counting the triple swap day if your holding period covers it.
The result shows the swap per night and the total in your account currency. Change the lot size or the number of nights to see how fast the cost grows. Other tools are on Calculators.
Where to find swap rates in MetaTrader
In MT4 or MT5, right-click an instrument in Market Watch and open its Specification. Look for the fields "Swap long", "Swap short", the swap type (points, percentage or money) and the day with the triple charge. See MetaTrader 4 and MetaTrader 5 for the platforms.
Precise points for experienced traders
- Swap is applied to the full position size, not to your margin. Leverage lets a small margin control a large position, so swap can be large relative to your deposit.
- Swap rates are not fixed. They change when rates, markups or market financing costs change. Recheck them before holding a position for a long period.
- Swap affects equity, not just the final result. Accumulated negative swap lowers equity and margin level. That brings a margin call or stop out closer.
- Carry trades are not free income. A positive swap can be wiped out by a small adverse price move. Leveraged forex and CFD trading can lose money fast, and holding positions for weeks does not reduce that risk.
- Partial closes reduce future swap in proportion to the size you close. Swap already charged stays in the result.
Swap free account
A swap free account, often called an Islamic account, does not charge or credit overnight swaps. It is designed for traders who avoid interest for religious reasons. Some brokers replace swap with another fee on certain instruments or after a holding period, so "swap free" does not always mean "no overnight cost". Read the conditions carefully. See Islamic finance for the wider context.
If you use Exness, check the current swap and swap-free conditions for each instrument in the Exness personal area or on the official site.
For the legal position on offshore trading platforms in Pakistan, read Law and regulators.
Frequent questions
What is swap in forex in one sentence?
It is the overnight fee or credit applied to a leveraged position held past the daily rollover. It reflects the interest rate differential plus a broker markup.
Is swap charged if I close before rollover?
No. Swap applies only to positions that are open at the moment of rollover.
Why are both long and short swaps negative on some pairs?
The broker's markup is deducted from both sides. When the interest differential is small, the markup can make both values negative.
Why was my swap bigger on one night?
That was most likely the triple swap day, when the weekend's swap is charged in one rollover. A holiday can also add extra days.
Does swap depend on leverage?
Not directly. It is calculated on the position size in lots. Higher leverage lets you open larger positions, though, and larger positions carry larger swaps.
How do I calculate swap for my trade?
Copy the swap points for your direction from the instrument specification. Then enter them in the swap calculator on this page with your lot size, account currency and number of nights.