Overnight Funding & Swap Rates

Why You Pay Overnight Funding

When you trade on leverage, you're effectively borrowing capital from the broker to control a larger position. Like any loan, this borrowing has a cost. If you hold a position overnight (past the daily rollover time, typically 5pm New York / 10pm London), a financing charge — called a swap or rollover fee — is applied to your account.

For day traders who close all positions before the daily cutoff, swaps don't apply. But for swing traders and position traders, overnight costs are a real factor that affects profitability.

How Swap Rates Are Calculated

Swap rates are determined by the interest rate differential between the two currencies in a forex pair, plus the broker's markup. If you're long a currency with a higher interest rate than the one you're short, you may actually receive a small payment (positive swap). If the differential works against you, you pay.

For non-forex CFDs (indices, shares, commodities), the swap is typically based on the benchmark interest rate of the relevant country plus a broker spread. These are almost always a cost, not a credit.

Triple Swap Wednesdays

Most brokers charge triple swap on Wednesdays to account for weekend settlement. Since markets are closed on Saturday and Sunday but the financing cost still applies, all three days are charged on a single night. This catches many new traders off guard — always check the swap schedule before holding positions through Wednesday night.

Managing Swap Costs

If you plan to hold positions for multiple days or weeks, calculate the total swap cost before entering the trade. Some brokers offer swap discounts at higher account tiers, which can make a material difference for swing traders. Alternatively, you can focus on shorter-duration trades to avoid swaps entirely, or trade in the direction that earns positive swap when the technical setup supports it.