All Collections
General Rules
Swaps, Fees & Dividends
Understanding Swap Fees: A Comprehensive Guide for Traders
Understanding Swap Fees: A Comprehensive Guide for Traders
Updated over a week ago


In the world of trading Forex, swap fees play a significant role. These fees can subsequently have a substantial impact on traders' profitability and risk management strategies. In this article, we will delve into the concept of swap fees, their importance, and how they might affect trading activities on Wednesdays specifically.

What are Swap Fees?

Swap fees, also known as rollover fees or overnight financing fees, are charges incurred when a trader holds a position open overnight. The forex markets operate 24/5, meaning that positions can remain open beyond the end of the trading day. When this happens, traders are subject to swap fees, which represent the interest rate differential between the two currencies or assets being traded.

In simpler terms, swap fees compensate for the opportunity cost of holding a position overnight, as traders could have used that capital elsewhere to generate a return. These fees are not consistent across all assets and can vary based on factors like the central bank's interest rates, liquidity, market sentiment, and demand for the asset.

Why are Wednesdays Special?

Wednesdays have a unique significance in the world of swap fees due to the structure of the forex market. A forex trading day starts and ends at 5:00 PM New York time (10:00 PM GMT). When a position is held open beyond this time, the trade is considered to be carried over to the next day, and swap fees are applied.

On Wednesdays, swap fees are typically charged at triple the usual rate. The reason behind this stems from the fact that the forex market operates on a T+2 basis, meaning that trades executed on Monday are settled on Wednesday. Since the settlement process involves actual currency exchange, the triple swap fee on Wednesday accounts for the interest rate differential for the extra two days.

Effect on Traders

For traders with short-term strategies or those who open and close positions within the same day (day traders), swap fees might not be a significant concern. However, for swing traders, long-term investors, or carry traders who rely on holding positions for extended periods, swap fees can eat into their potential profits.

Managing Swap Fees

Traders can employ various strategies to manage swap fees effectively:

  1. Timing: Being mindful of the rollover time and avoiding positions that extend beyond the rollover period can help minimize swap fees.

  2. Currency Pair Selection: Choose currency pairs wisely, considering their interest rate differentials and how they align with your trading strategy.

Where to View Swap Fees

Trading Platform 4:

  1. Click 'View' along the top menu

  2. Select 'Symbols'

  3. Select which currency pair you want to see the swaps for, and click 'Properties'

  4. You can now see the long and short swap rates in the pop-up window

Trading Platform 5:

  1. Open the MT5 mobile app on your phone.

  2. Tap on the "Quotes" tab or icon to access the list of tradable instruments.

  3. In the "Quotes" section, find and tap on the specific trading instrument (currency pair or CFD) for which you want to view the swap fees.

  4. A new window will appear showing various details about the selected instrument, including the "Swap Long" and "Swap Short" values, which represent the swap rates for holding long (buy) and short (sell) positions overnight.

Actual swap fees may vary depending on market conditions and from broker to broker. Please check the specifications of the particular instrument before trading.

Swap Free Accounts

Please see our Help Article on Swap Free Accounts here.

If you have any further questions relating to Swap Fees, please do not hesitate to reach out to our Trader Success Team through our dedicated Live Chat.

Did this answer your question?