In forex trading, SWAP refers to the interest fee that is either paid or earned for holding a trading position overnight. It's also called the rollover fee.

📌 How SWAP Works

When you trade forex, you're buying one currency and selling another. Each of these currencies has an associated interest rate set by their central banks.

• If the interest rate of the currency you're buying is higher than the one you're selling, you may earn positive SWAP.
• If it's lower, you may pay negative SWAP.

The broker calculates this difference and applies it at a specific time (usually at 5:00 PM New York time).

🧮 Example:

Suppose you're trading EUR/USD and:

• EUR interest rate = 3.50%
• USD interest rate = 5.50%

If you're buying EUR/USD (buying EUR, selling USD), you're:

• Earning 3.5% from EUR
• Paying 5.5% for USD
  Net = -2% → you pay SWAP.

If you're selling EUR/USD, you're:

• Paying 3.5% for EUR
• Earning 5.5% for USD
  Net = +2% → you receive SWAP.

📅 Triple SWAP Wednesdays

Because forex is a T+2 market (settled 2 days later), brokers apply 3 days' worth of SWAP on Wednesday night to cover the weekend.

💡 Notes:

• SWAP is applied automatically by your broker.
• It's visible in your MT4/MT5 terminal under Trade > Swap.
• Some brokers offer Islamic accounts with no SWAP, to comply with Shariah law.