Swap

A swap (or rollover fee) is the interest rate differential between two currencies, charged or credited to your account when you hold a position overnight. If you're long a currency with a higher interest rate than the one you're short, you receive a positive swap. If it's the other way around, you pay.

Swap rates are determined by each broker and usually reflect the interbank interest rate differential, with a markup. They're quoted per lot per night and can vary significantly between brokers. Some pairs have large swap costs — holding a short position on a high-yield emerging market currency against a low-yield currency like EUR or JPY can cost several dollars per lot per night.

Some brokers offer swap-free (Islamic) accounts for traders whose religious beliefs prohibit paying or receiving interest. These accounts don't charge swaps but may have other fee structures (like wider spreads or administration fees) to compensate. Even if you're not Muslim, some traders use swap-free accounts for long-term positions to avoid accumulating swap costs.