Open a trade and close it within the same day and you pay the spread and any commission. Hold it overnight and a third cost appears: the swap, also called rollover or overnight financing.
What it is
When you hold a leveraged position, you are in effect borrowing one side of it. At a fixed time each day, the platform settles the cost of that carry. Depending on the instrument and on which side you hold, the swap can be a charge or a credit.
On Zexca's TradFi demo desk the daily rollover happens at the end of the trading day, 17:00 New York time. Any position open at that moment gets a swap line in its Swap column, which is added to your balance when the position closes.
Where the number comes from
Different brokers set swaps differently. On the demo desk, the swap follows the funding rate of the underlying perpetual market, because that rate is the real market price of carrying the position:
daily swap per lot = rate per hour × 24 × contract size × price
- A long position pays a positive rate, a short receives it.
- If the rate is negative, it is the other way round.
Worked example. The hourly rate is 0.001%, you hold 1 lot of EURUSD (contract size 100,000) and price is 1.0845:
0.00001 × 24 × 100,000 × 1.0845 = 26.03 USD per day, charged to a long and credited to a short.
The rate changes with the market, so the swap changes from day to day. Look at the Specification of the symbol before you hold it overnight: it shows the current swap for longs and shorts.
Triple swap day
Markets are closed at the weekend but the cost of carrying a position is not, so brokers charge three days of swap on one weekday to cover Saturday and Sunday. On the demo desk this day is Wednesday for forex and metals and Friday for stocks and oil. If you hold a forex position through Wednesday's rollover, you pay three times the daily figure.
What to do with it
- For a day trade closed before the rollover, the swap is zero. Nothing to plan.
- For a swing trade held for days, add the swap to your cost, next to the spread. A position held for ten days at the example rate costs about 260 USD in swap on one lot, which matters against a small expected gain.
- Check whether the swap is in your favour. Some trades are held mainly for a positive carry, but it should never be the only reason to enter.
- Avoid carrying a position through triple swap day without meaning to.
For the other costs of trading, read the spread, slippage and fees and the forex market sessions.
Educational content, not investment advice. Trading carries risk, including the loss of capital.