What is Swap / Rollover?

The interest paid or earned for holding a leveraged position overnight, based on the interest-rate gap between the two currencies.

Swap, or rollover, is the interest adjustment applied to positions held open past the daily rollover time (typically 5pm New York). Because every forex position is effectively borrowing one currency to hold another, the interest-rate difference between the two flows through your account: hold the higher-yielding currency and you may earn a small credit; hold the lower-yielding one and you pay. Most retail traders pay swap in both directions once broker markups are included, and Wednesday's rollover is usually charged triple to cover the weekend.

Swap is background noise for scalpers and day traders who close everything before rollover, but it compounds into a real cost for swing and position traders holding for days or weeks — sometimes enough to erase the profit on a marginal trade. It also matters religiously: because swap is interest, Muslim traders use Islamic swap-free accounts, where brokers replace the interest mechanism with an administration-fee structure. Check the swap rates on your instrument before planning any multi-day hold.