Forex Swap rate: what is it?
A forex swap rate or rollover is defined as the overnight interest added or deducted for holding a position open overnight. Swap rates are determined by the overnight interest rate differential between the two currencies involved in the pair and whether the position is long or short.
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What You Should Know About Swap Rates
- Swaps are applied only when positions are kept open until the next forex trading day.
- Some currency pairs may have negative swap rates on both sides, both ‘long’ and ‘short’.
- Swap rates are calculated in points, MetaTrader 4 and 5 convert them automatically into the base currency of your account.
- Each currency pair has its own swap charge and is measured on a standard size of 1.0 lots (100,000 base units).
- On Wednesday night swaps for FX, Metals, Bonds and CFDs on Commodities are charged a triple rate the usual rate. On Friday night swaps for Energies, Indices and Cryptocurrencies are charged a triple rate the usual rate.
Overnight Swap Rates
- You will able to view the latest swap rates within your MetaTrader 4 and MetaTrader 5 trading terminal by following the process outlined below.
- Right click on any instrument in the ‘Market Watch’ section, then left click on the ‘Specification’ option from the dropdown menu. A new window will open that shows the long and short swap rate for the pair selected.