Home / Course / Module 2 / Swaps, Rollover and Carry: The Cost of Holding Overnight

Module 2 · Lesson 7 of 7

Swaps, Rollover and Carry: The Cost of Holding Overnight

If you keep a leveraged position open past the daily cut-off, your broker applies an overnight financing charge or credit. This lesson explains where it comes from and how to estimate it.

Intermediate5 min readLast reviewed 26 October 2026

Written by The Gold Desk editorial team. Not reviewed by a regulated financial adviser. Educational content, not financial advice.

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Educational content only. Nothing here is a recommendation, and no result is guaranteed.

Module lessons and contents

Full course

On this page

  1. What you will learn
  2. Why overnight charges exist
  3. Which side pays and which side earns
  4. Estimating a swap, step by step
  5. The triple swap day
  6. The carry trade idea and its risks
  7. Checking swaps before you hold a trade
  8. Key takeaways
  9. Test yourself
  10. Frequently asked questions

After this lesson you will be able to

  • Explain what a swap (rollover) is and why it exists.
  • Estimate a daily swap from an interest rate difference.
  • Explain the triple swap day.
  • Describe the carry trade idea and its risks.

Why overnight charges exist

Spot forex deals settle about two business days after the trade. To avoid actually delivering currency, brokers roll over open positions each day to the next settlement date. The cost or credit of doing so is called the swap (also rollover or overnight financing).

The swap exists because holding one currency means earning its interest rate, and being short another currency means paying its interest rate. The swap is roughly the difference between the two interest rates, adjusted by the broker, who adds a markup.

Key idea

You are effectively 'borrowing' one currency to hold the other. If the one you hold pays more than the one you borrowed, the swap can be a credit. If not, it is a debit.

Swaps matter most to traders who hold positions for days or weeks. A trade opened and closed within the same day (before the cut-off, often 5 p.m. New York time) does not normally pay a swap.

Which side pays and which side earns

For a pair like AUDJPY, imagine the Australian dollar has a higher interest rate than the yen.

  • Buying AUDJPY: you hold the higher yielding currency and are short the lower one. The swap can be positive (a credit), before the broker's markup.
  • Selling AUDJPY: you are short the higher yielding currency. The swap will be negative (a charge).

Brokers add their markup, so in practice both directions can show a charge, with one smaller than the other. Always read the swap figures in your platform's contract specification, where they are shown per lot per night. They change as interest rates and broker terms change.

Gold and other non-currency instruments also have financing charges, and the amounts depend on the broker and on interest rates at the time. See Gold Trading for Beginners for the overall cost picture.

Estimating a swap, step by step

Worked example 1: interest rate difference (hypothetical rates)

Suppose currency A has an annual interest rate of 5 percent and currency B has 1 percent. You hold 1 lot (100,000 units) of A against B.

  • Rate difference = 5% - 1% = 4% a year.
  • Annual interest on 100,000 = 100,000 x 0.04 = 4,000 units.
  • Per day = 4,000 / 365 = about 10.96 units.
  • The broker takes a markup, so the credit you receive is lower, perhaps well below that, and the debit for the other side is higher.
Worked example 2: cost of holding through a week (hypothetical)
  • Platform shows a long swap of -$6.00 per lot per night for a pair. You hold 0.50 lot.
  • Per night = -6.00 x 0.50 = -$3.00.
  • Holding for 10 ordinary nights (ignoring the triple swap day, covered next): 10 x -$3.00 = -$30.
  • That $30 is a steady drag that needs to be covered by the trade's profit.

The triple swap day

Because spot settlement is two business days ahead, positions held over the weekend need extra days of financing. Brokers usually apply three days of swap on one night, typically Wednesday for most currency pairs, to cover Saturday and Sunday. This is called the triple swap (or triple rollover).

Worked example: triple swap (hypothetical)
  • Swap is -$3.00 per night on your position.
  • You open on Monday and close on Friday morning, so you are charged on the Monday, Tuesday, Wednesday and Thursday rollovers.
  • Monday, Tuesday and Thursday count once each (3 charges). Wednesday counts three times (3 charges).
  • Total = (3 + 3) x -$3.00 = 6 x -$3.00 = -$18.00.

Some instruments, including gold at some brokers, have a different triple day, so check the specification. Some brokers also offer swap free accounts, which may charge fees in other ways.

The carry trade idea and its risks

A carry trade means buying a higher yielding currency funded by selling a lower yielding one, to collect the interest rate difference over time. The appeal is steady income from the swap.

The risk is that the exchange rate can move more than the interest earned. Interest differences are small day to day, but price moves can be large and fast, particularly in risk-off periods when carry positions are often closed all at once.

Worked example: carry versus price move (hypothetical)
  • A 4 percent annual rate difference on a position is about 0.33 percent a month (4 / 12).
  • If the exchange rate falls 2 percent against you in a month, that is six times larger than the monthly carry (2 / 0.33).
Warning

Carry income is not a guaranteed return. With leverage, a price move against the position can far exceed the swap received, and leveraged trading can lose money quickly.

For how leverage amplifies this, revisit Forex Leverage and Margin.

Checking swaps before you hold a trade

Because swaps are small each day, it is easy to ignore them, and just as easy to be surprised by them on longer trades. A short routine helps.

  • Find the figures. In most platforms, open the instrument's specification and look for swap long and swap short. They are quoted per lot per night, sometimes in points or in money, so check the units.
  • Multiply by your size and nights. Swap per night x lots x number of nights, adding triple swap days.
  • Compare with your target. If a three week trade might pay $45 in swaps against an expected $150 gain, the swap is a significant part of the return.
  • Review regularly. Swap rates change when interest rates or broker terms change, so last month's figures may no longer apply.

Day traders who close before the rollover time can largely ignore swaps. Swing traders who hold for days should build swaps into the plan. This is part of the same cost thinking as the spread in Pips, Lots and Spreads. Some religious or ethical preferences lead people to choose swap free accounts, and anyone with questions about tax treatment of swaps should check with a qualified professional.

Key takeaways

  • A swap is the overnight financing credit or charge for holding a position past the daily cut-off.
  • It is roughly based on the interest rate difference between the two currencies, plus a broker markup.
  • One direction may earn a credit while the other pays, but both can be charges after the markup.
  • Triple swap days cover the weekend, commonly on Wednesday for currency pairs.
  • Daily swap estimate: annual rate difference times position size, divided by 365.
  • Carry income can be wiped out by price moves, especially with leverage.

Test yourself

Frequently asked questions

Do I pay a swap if I close the trade the same day?

Normally not, if the position closes before the broker's daily rollover time. Check your broker's rollover time, which is often 5 p.m. New York time.

Can the swap be positive?

Yes, depending on the pair, direction and broker markup. Many positions show a charge in both directions, so check the figures on your platform.

Forex Leverage and Margin: How Exposure Is MagnifiedWhat Moves Currencies: Rates, Inflation, Growth and SentimentGold trading risk management
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