Forex rollover and swap (triple swap Wednesday)

What it is

Holding a forex position past 17:00 New York time (the daily rollover) means paying or receiving interest, called swap. It comes from the interest rate difference between the two currencies, plus the broker's markup, so it can be a cost on both sides. On Wednesdays most brokers charge three days' swap at once, to cover the weekend, because spot forex settles two days later. Index and commodity CFDs often take the triple charge on Friday instead.

Spreads also widen around the rollover, often sharply for a few minutes, which can trigger tight stops.

How to spot it

• Your platform's contract specification shows the swap long and swap short for each instrument.

How to use it

• Include swap in the cost of trades you hold overnight, especially for swing trades.
• Check your prop firm's rules on holding overnight and over weekends.
• Avoid placing tight stops right on the 17:00 rollover.

Common mistakes

• Forgetting the Wednesday triple swap on a big position.
• Being stopped out by the rollover spread spike.

Related