Forex Rollover Rates: What You Pay to Hold Overnight
Rollover or swap rates are the daily interest credited or debited when you hold a forex position past the daily cutoff.
Forex Rollover Rates: What You Pay to Hold Overnight
If you hold a forex position overnight, you either earn or pay interest. This daily settlement is called rollover (or swap). It is a hidden cost — or a hidden reward — that affects every overnight trade. Understanding rollover is essential for swing traders, carry traders, and anyone holding positions more than a day.
What Is Rollover?
Rollover is the process of extending the settlement of an open position to the next trading day. Because forex trades settle in two business days (T+2), holding past the daily cutoff means your broker rolls the position forward.
The standard rollover cutoff is 17:00 New York time (22:00 UTC in winter, 21:00 UTC in summer). Positions open at this moment are subject to swap.
How Swap Is Calculated
Swap is based on the interest rate differential between the two currencies:
- If you are long the higher-yielding currency, you typically earn swap.
- If you are long the lower-yielding currency, you typically pay swap.
The amount depends on the interest rate differential, the direction of your trade, your position size, and your broker's markup.
Swap Example
Suppose AUD pays 4.00% and JPY pays 0.10%. Holding 1 standard lot of AUD/JPY long might earn roughly $5–$10 per day in positive swap, depending on the broker. Holding the same pair short would cost a similar amount.
Triple Swap on Wednesdays
Because forex settles T+2, holding a position through Wednesday's rollover covers the weekend. Brokers apply triple swap on Wednesday nights to account for Saturday and Sunday.
| Day Held | Swap Applied |
|---|---|
| Monday night | 1 day |
| Tuesday night | 1 day |
| Wednesday night | 3 days |
| Thursday night | 1 day |
| Friday night | 0 (settles before weekend) |
Why Brokers' Swap Rates Differ
Swap rates vary between brokers because they add a markup to the interbank rate, liquidity providers differ, some brokers use their own financing rates, and Islamic account types have no swap but other restrictions. Always check the broker's swap table in the platform's contract specifications.
How Rollover Affects Strategy
- Swing trading — swap accumulates over days; trading toward positive swap can add to returns
- Carry trading — the strategy exists entirely because of rollover, earning daily interest on the differential
- Day trading — closing before the cutoff means swap barely matters
When Swap Hurts
- Holding a position against the carry for weeks
- Trading exotic pairs with wide swap spreads
- Holding through triple-Wednesday unexpectedly
Practical Tips
- Check the swap rate before opening overnight positions
- Prefer pairs with positive swap when swing trading long
- Be aware of triple-Wednesday before holding over the weekend
- If you trade news, avoid being caught at the 17:00 rollover when spreads spike
Rollover is a quiet but real cost of trading. For short-term traders it barely matters, but for swing and position traders it can make the difference between profit and loss.