In the world of forex trading, swaps are an essential concept that every trader should understand. Here's a comprehensive guide.
A swap, also known as a rollover fee, is a fee charged for holding a trading position overnight. This fee is determined by the interest rate differential between the two currencies involved in the trade. Essentially, it's the cost of carrying a position from one day to the next. Swaps can be positive or negative, depending on the interest rate differential.
Note: JustMarkets offers swap-free accounts for both Muslim and non-Muslim clients. Here's how you can check whether your trading account is swap-free.
The size of the swap varies for each trading instrument and can depend on several factors:
- Order type (buy or sell)
- Currency pair exchange rate
- Interest rate of central banks
Note: You can view swap rates on our website under the Contract Specifications.
You can find the schedule for the most instruments below:
| Day | Time | Swap size | Swap size (Indices, stocks) |
|---|---|---|---|
| Monday | 00:00 GMT+2 | Standard | Standard |
| Tuesday | 00:00 GMT+2 | Standard | Standard |
| Wednesday | 00:00 GMT+2 | Triple | Standard |
| Thursday | 00:00 GMT+2 | Standard | Standard |
| Friday | 00:00 GMT+2 | Standard | Triple |
| Saturday | Not applied | Not applied | Not applied |
| Sunday | Not applied | Not applied | Not applied |
Calculating swaps can be straightforward if you follow these formulas:
-
For Forex and Exotic Currencies (Result in Quote Currency):
- Formula: Swap = lots * swap percentage * point size.
-
Example:
Sell 0.3 lots EURUSD.m.
Point size = 100,000 * 0.00001 = 1.
Swap (EURUSD.m) = 0.3 * (-0.09) * 1= -0.027 USD.
-
For CFDs, Indices, Shares, Crypto, Oil (Result in Margin Currency):
- Formula: Swap = Contract Size * lots * Rollover price * swap percentage / 360.
-
Example:
Buy 1 lot ETHUSD.s.
Swap (ETHUSD.s) = 1 * 1 * 472.16 * (-0.2) / 360= -0.26 USD.
Note: To find details for the calculation, such as contract size and swap percentage, right-click on the trading instrument in MetaTrader and select Contract Specification. The rollover price is the last price of the trading instrument from the previous trading session (before the market close), which can be checked in the trading terminal using the M1 timeframe.