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Intermediate

Overnight Fee (Swap)

Also known as: Rollover Fee, Swap Rate, Financing Charge, Overnight Financing

What is Overnight Fee (Swap)?

An Overnight Fee, or Swap, is the interest adjustment applied to a leveraged position held open past the daily market rollover (typically 22:00 GMT). It reflects the interest-rate differential between the two currencies in a pair, or the financing cost of a CFD, and can be either charged to or credited to the trader.

Because leveraged trades are effectively borrowed positions, the trader pays or receives the cost of carrying them overnight. Buy a currency with a higher interest rate than the one you sell and the swap may be positive (a credit); the reverse produces a negative swap (a charge). On Wednesdays most brokers apply a triple swap to account for weekend settlement.

Key takeaways
  • Swap is the interest cost/credit for holding a position overnight.
  • Direction and rate differential decide if it's a charge or a credit.
  • Wednesday usually carries a triple swap for weekend settlement.
  • Accumulated negative swaps erode long-horizon client equity.
  • Some IB programs share the broker's swap markup as revenue.

The cost compounds for position holders. A swing trader holding 5 lots of a pair with a -$7 per-lot daily swap pays $35 a day, or roughly $245 over a week including the triple-swap Wednesday. Over a multi-week trend trade, accumulated financing can quietly erode a meaningful share of the position's equity.

For partners, swaps matter twice: they shape client survival on long-horizon strategies, and in some programs they are a revenue line the IB shares. A broker running a markup on raw swap rates may pass a slice of that markup to the partner.

How it works

At rollover the broker closes and reopens each open position at the same price and applies the swap adjustment based on the instrument's long and short swap rates. Those rates derive from the underlying interest-rate differential (or borrowing cost for CFDs and crypto) plus the broker's markup. A positive rate credits the account; a negative rate debits it. Wednesday's triple swap covers Saturday and Sunday settlement.

Brokers publish per-lot long and short swap values in the platform's instrument specification, so both traders and IBs can calculate carry in advance. Where a broker marks up raw swap rates, the markup is a revenue stream, and some partnership programs share a percentage of it with the referring IB — an additional, position-duration-driven income line on top of spread and commission rebates. Islamic (swap-free) accounts replace swaps with a flat administration fee.

  1. Find the swap rates

    Open the instrument specification in MT4/MT5 to read the long and short swap value per lot.

  2. Identify the direction

    Determine whether the client's position earns a positive credit or pays a negative charge based on trade direction.

  3. Account for triple swap

    Apply the triple charge on Wednesday (or the broker's stated day) to cover weekend settlement.

  4. Project the carry

    Multiply per-lot swap by lots by days held to estimate the total financing impact on the position.

Why it matters for partnership: Negative swaps quietly drain the equity of swing and trend-following clients you refer, shortening their lifetime. Some programs also share swap revenue with the IB, so negotiate that line and set client expectations about overnight costs before they hold for weeks.

Formula
Swap = Swap Rate per Lot × Lots × Nights Held (×3 on triple-swap day)
Real World Example

A client of an IB on FP Markets holds 3 lots of AUD/JPY as a carry trade with a positive long swap of about $4.20 per lot per night. Held for 20 nights including two triple-swap Wednesdays, the position accrues roughly 3 × $4.20 × 24 effective nights ≈ $302 in swap credits. If the IB's program shares a slice of the broker's swap markup, that duration generates partner revenue on top of the spread rebate.

Standard vs Swap-free (Islamic) accounts
Feature Standard account Swap-free account
Overnight cost Swap charged/credited nightly No swap; flat admin fee may apply
Best for Carry trades, positive-swap holds Faith-based clients, no-interest needs
Long holds Negative swap compounds Fixed fee, predictable cost

Pro Tip

If your clients favor long-horizon or trend-following strategies, negotiate a partnership deal that shares the broker's swap markup, and always show clients the per-lot swap rate before they commit to multi-week holds.

Common Pitfalls

Marketing multi-week trend strategies without flagging overnight financing — clients hold through accumulating negative swaps and blow their accounts on carry costs they never budgeted for.

FAQ

What is a swap or overnight fee?

It's the interest adjustment applied when a leveraged position is held past the daily rollover. It reflects the interest-rate differential of the pair or the CFD's financing cost and can be a charge or a credit.

Why is Wednesday's swap triple?

Most brokers apply a triple swap on Wednesday to account for the two-day weekend settlement of positions that would otherwise settle over Saturday and Sunday.

Can swaps ever pay the trader?

Yes. When you hold a position that earns a positive interest differential (a carry trade), the swap is credited rather than charged. Rates and markups still vary by broker.

Do IBs earn from client swaps?

In some programs, yes. Where the broker marks up raw swap rates, a share of that markup can be paid to the referring IB, adding a duration-based revenue line.

What is a swap-free account?

An Islamic account replaces overnight swaps with a flat administration fee to comply with no-interest requirements. Terms and eligibility vary by broker and jurisdiction.

How do I calculate swap for a position?

Multiply the per-lot swap rate (from the platform's instrument specification) by the number of lots and nights held, applying the triple charge on the broker's triple-swap day.

Sources & further reading
Reviewed by the Revenika Editorial Desk Last updated

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