Direct Answer

A swap, also called a rollover fee, is the interest credited or debited when you hold a forex position past the daily rollover time, usually 5 PM New York time. Every currency pair combines two interest rates, so holding one currency against another means you effectively earn one rate and pay the other. If you are long the higher-yielding currency, the swap is positive and money lands in your account. If you are long the lower-yielding one, you pay. On Wednesdays the charge triples to account for the weekend, when markets are closed but interest still accrues.

How Swap Rates Are Calculated

Brokers publish two swap values per pair: the long swap and the short swap, quoted as points per lot per night. The raw value comes from the interest-rate differential between the two central banks, then the broker adds its own markup, which is why swaps are rarely perfectly symmetrical. For example, if the rate gap implies a small daily credit on long AUD/JPY, the broker might pay you slightly less and charge slightly more on the short side. Swap values change as central banks move rates, so check your broker's specification page rather than relying on old numbers.

Why Wednesday Swaps Are Tripled

Forex trades settle two business days after execution, a convention called T+2. A position held over Wednesday night settles over the weekend, covering Saturday and Sunday, so three days of interest apply at once. That is why your account shows a triple swap charge every Wednesday evening. Some traders close positions before Wednesday rollover purely to avoid the triple charge, while carry traders welcome it because their positive swap triples too. Note that holidays can shift the triple-swap day, so check your broker's calendar around long weekends.

Swaps, Carry Trades and Your Account Plan

The carry trade is built entirely on swaps: traders buy high-yielding currencies like the Australian dollar or Mexican peso against low-yielding ones like the yen, collecting positive swap night after night. It works until a market shock sends everyone rushing back into safe currencies at once. For most beginners, swaps are simply a cost to track: check the swap column in your trading platform before holding positions for weeks. Traders who avoid interest for religious reasons can ask brokers for swap-free Islamic accounts, which replace swaps with a flat administrative fee. (Plan position sizes around all costs: forex risk management basics.)

Frequently Asked Questions

Do I pay swap on intraday trades? No. Swaps apply only if your position is open at the daily rollover time. Close before 5 PM New York time and no swap is charged or earned. Can swap fees turn a winning trade into a loser? On long-held positions, yes. A small negative swap compounds nightly, so always factor it into trades you plan to keep for weeks or months. Check the swap column in your platform before committing to a long hold. Are swap-free accounts really free? Not exactly. Brokers replace swaps with administrative fees or wider spreads. Compare the total cost against a standard account before choosing.