If you notice a swap charge or credit on your trading account, it is usually because you hold a trading position overnight. Swap is an overnight financing adjustment applied to eligible positions that remain open overnight. Depending on the trading product and whether you hold a Buy (Long) or Sell (Short) position, swap may be deducted from or credited to your trading account.
How is swap applied to my trading positions?
Swap is automatically applied when an eligible position remains open past 00:00 server time.
- Positions held overnight: Swap may be charged or credited based on the applicable swap rate.
- Positions closed before 00:00 server time: Overnight swap is not applied.
- Positions held across triple-swap days: Additional swap applies on Wednesday for Forex and Metals, and Friday for Commodities, Shares and Indices, to account for weekend financing adjustments.
The applicable swap time is based on the trading server time, which may differ from your local time zone. All times are based on server time: GMT+2 during non-daylight saving time and GMT+3 during daylight saving time.
Please note that the applicable triple-swap day may vary depending on the trading product and its settlement arrangements. Refer to the product specifications for the applicable swap schedule.
How is swap calculated?
Swap is calculated using different methods depending on the trading product.
Calculation Method | Formula |
|---|---|
In Currency | Swap Rate × Lot Size × Number of Nights Held |
In Points | Swap Rate × Contract Size × 10^(-Digits) × Lot Size × Number of Nights Held |
In Percentage | (Swap Rate ÷ 100 ÷ 360) × Contract Size × EOD Price × Lot Size × Number of Nights Held |
- Swap Rate: The applicable overnight financing rate for the trading product.
- Lot Size: The trading volume of your position.
- Contract Size: The number of units represented by one lot.
- Digits: The number of decimal places used in the product's price quotation.
- EOD Price: The End-of-Day market price used for calculation.
- Number of Nights Held: The number of applicable overnight periods, including any multiplied swap adjustments.
The calculation method depends on the trading product, and the final swap amount may vary according to the applicable rates and trading conditions.
Positive swap rates generally result in a credit, while negative swap rates generally result in a charge.
Holding opposite positions on the same product does not necessarily cancel out swap charges, as Buy and Sell positions may have different swap rates.
What will change the swap amount?
The swap amount depends on several factors:
- Trading product: Different products have different swap rates.
- Trade direction: Buy (Long) and Sell (Short) positions may have different swap rates.
- Position size: Larger trading volumes generally result in higher swap charges or credits.
- Holding period: The number of applicable overnight periods affects the total swap.
- Applicable swap rate: The swap rate for each trading product may change over time.
How can I check the swap rate in MetaTrader 4 (MT4) or MetaTrader 5 (MT5)?
You can check the applicable swap rates directly in MetaTrader 4 (MT4) or MetaTrader 5 (MT5) by following these steps:
- Open MetaTrader 4 (MT4) or MetaTrader 5 (MT5).
- Go to Market Watch.
- Right-click the trading product you want to check.
- Select Specification or Properties, depending on your trading platform.
- Look for Swap Long and Swap Short to view the applicable rates.
The displayed swap rates may change over time.
What should I check before holding a position overnight?
Before keeping a trading position open overnight, consider the following:
- Review the swap time: Be aware that swap is applied at 00:00 server time, which may differ from your local time.
- Check the swap rate and type: Review the applicable Swap Long or Swap Short rate and Swap Type in your trading product's specifications to identify the correct rate and calculation method for your position.
- Consider the holding period: Swap may accumulate each night you hold a position, increasing your total overnight financing costs.
- Check for triple swap: Triple swap applies on Wednesday for Forex and Metals, and Friday for Commodities, Shares and Indices, to account for weekend financing adjustments.
- Review your trading account type: Swap-free (Islamic) trading accounts are exempt from standard swap charges, but administration fees may apply to certain products. Check the applicable administration fee schedule before holding positions overnight.
Understanding the applicable swap rates and calculation methods can help you estimate the potential overnight financing costs of your trading positions.
