IC Markets
A swap, also called a rollover or overnight financing fee, is applied to any position still open at the daily rollover, usually 5pm New York time. It is not a broker penalty; it reflects the interest-rate difference between the two currencies in your pair. Sometimes it is a charge, sometimes a small credit. This guide explains the mechanics.
Where swap comes from
When you hold a forex position, you are effectively long one currency and short the other. Each currency has an interest rate set by its central bank. You earn the rate on the currency you are long and pay the rate on the currency you are short, and the swap is the net of the two, adjusted by the broker's own markup. If you are long a high-rate currency against a low-rate one, the swap can be a small credit. In the other direction, or once the broker's markup is applied, it is usually a cost.
How it is calculated
| Applied | At the daily rollover (typically 5pm New York time) |
|---|---|
| Based on | The interest-rate differential of the pair, plus the broker's markup |
| Scales with | Position size; a 1-lot position pays more swap than 0.1 lots |
| Direction | Different for long and short; one side may be a credit |
| Shown | As swap long / swap short in the instrument specification, per lot per night |
Check the instrument specification in your platform for the exact swap long and swap short values. They change as central bank rates change, and they are typically quoted in points or account currency per lot per night.
Why Wednesday is charged triple
Forex settlement is two business days. A position held over the weekend still accrues interest for Saturday and Sunday, but no rollover happens on those days. To account for it, the broker charges three times the normal swap at the Wednesday rollover (or Friday for some instruments), covering the upcoming weekend in advance. A large position held across Wednesday can see a noticeably bigger financing line that night.
Swap-free (Islamic) accounts
A swap-free account removes the interest component so positions can be held overnight without a swap charge or credit, which is designed for traders who cannot pay or receive interest for religious reasons. Brokers recover the cost another way: a flat administration fee per lot after a grace period of a few nights, a slightly wider spread, or exclusion of certain instruments. Read the specific terms; "swap-free" is not the same as "cost-free".
| Account | Overnight cost model |
|---|---|
| Standard | Swap charge or credit at each rollover, triple on Wednesday |
| Swap-free, grace period | Free for X nights, then a flat admin fee per lot |
| Swap-free, wider spread | No overnight fee, but a higher spread on every trade |
Yusuf held a 2-lot position for six nights and was surprised by the financing total. The swap on his pair was a cost, and one of those nights was a Wednesday, charged triple. He recalculated: five normal nights plus one triple night was the equivalent of eight nights of swap on a 2-lot position. Now he checks the swap long and short values before holding a position for more than a day, and closes intraday when the swap on a pair is a heavy cost.
If you day-trade and close every position before 5pm New York time, you never pay swap. If you swing-trade, check the swap direction and size for your pair before entering, and factor several nights of swap into your target.
Swap is interest, not a fee the broker invented. You pay or receive the rate difference between the two currencies each night you hold. Wednesday is triple because the weekend still counts even though there is no rollover on Saturday. If you never hold past the rollover, it never touches you.
Frequently asked
What is a swap fee in forex?
It is the interest cost or credit for holding a position overnight, applied at the daily rollover. It reflects the difference between the interest rates of the two currencies in your pair, adjusted by the broker's markup. It can be a charge or, less often, a small credit.
Why is swap charged three times on Wednesday?
Forex trades settle two business days later, so a position held over the weekend still accrues interest for Saturday and Sunday. Since there is no rollover on those days, the broker charges triple swap on Wednesday to cover the weekend in advance.
How do I avoid paying swap?
Close every position before the daily rollover, typically 5pm New York time, so no position is open when swap is applied. Alternatively, use a swap-free account, but check what replaces the swap, such as a per-lot administration fee.
Where do I see the swap rate for my pair?
In the instrument specification in your trading platform, shown as swap long and swap short, usually in points or account currency per lot per night. The values change when central bank interest rates change.
Is a swap-free account really free?
No. Brokers recover the cost through a flat administration fee per lot after a grace period, a wider spread on every trade, or by excluding some instruments from swap-free treatment. Read the specific terms for your holding period.