Trading
Swap (Rollover)
Interest paid or earned for holding positions overnight.
Full Definition
Swap (or rollover) is the interest charged or credited for holding forex positions overnight past the daily cutoff time (usually 5 PM EST). It's based on the interest rate differential between the two currencies in a pair. Positive swap means you earn interest; negative swap means you pay interest. Swap rates vary by broker and instrument.
Example
If you hold a long AUD/JPY position overnight and Australia has higher interest rates than Japan, you might receive positive swap. Conversely, if you're short AUD/JPY, you'd pay swap.
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