FOREX SWAPS And ROLL OVER
At Market101, we ensure full transparency in our swap rates, helping you make informed trading decisions. Stay ahead by understanding how swap charges impact your trades and optimize your strategies accordingly.
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Frequently Asked Questions
What is a swap in trading?
A swap, also known as a rollover fee, is the interest paid or earned for holding a trading position overnight. It is calculated based on the interest rate differential between the two currencies in a pair or the contract specifications for commodities and indices.
How are swap charges calculated?
Swap charges are determined by the interest rate differential between the traded assets and the broker’s fee. The calculation considers position size, swap rate, and the number of nights the position is held.
When are swap charges applied?
Swap charges are applied at the end of each trading day if a position is held overnight. Most brokers apply triple swaps on Wednesdays to account for weekend rollovers.
Can I earn a swap instead of paying it?
Yes, depending on the interest rate differential, you may receive a swap credit instead of being charged a fee. If the interest rate of the currency you are buying is higher than the currency you are selling, you could earn a swap.
Where can I check the swap rates for my trades?
Swap rates are typically available on your broker’s trading platform or website. They can change daily based on market conditions and interest rate fluctuations.
How can I avoid or minimize swap charges?
You can minimize swap charges by closing positions before the rollover time, choosing swap-free trading accounts (if available), or trading assets with lower swap costs.