Swap, also known as rollover, is a commission that a trader either receives or pays for holding a position open overnight. This financial instrument plays a significant role in currency trading and can greatly impact trading outcomes.
There are two types of swaps:
Swap long: Applied for holding a buy position overnight.
Swap short: Used for holding a sell position overnight.
The cost of the swap is expressed in pips per lot and depends on the financial instrument being traded. For example, on the Alpari platform, you can review the current swap rates for each symbol on the contract specification page.
A negative swap value indicates that holding the position open overnight will deduct the swap amount from the trader's account, while a positive value indicates the accrual of the swap to their account.
When calculating the swap cost, the following points should be taken into account: For currency pairs and metals, position rollover from Wednesday to Thursday involves triple calculation of the swap cost. Similarly, for positions on USD/CAD, USD/TRY, EUR/TRY, rolled over from Thursday to Friday, triple calculation of the swap cost is applied. When rolling over CFD positions to the next day, from Friday to Monday, a triple calculation of the swap cost is also used.
Examples of Swap calculation for different instruments
For Currency Pairs:
- Currency Pair: EUR/USD
- Number of lots: 1 lot
- Pip cost per lot: $10 (typical for standard lot on EUR/USD)
- Swap rate: -1.5 (negative means you're paying swap)
- Number of nights: 3
- The Swap will be calculated like this = 1 lot × $10 × (-1.5) × 3 nights = -45
For cryptocurrencies:
SWAP for Cryptocurrency = (Contract × V (lots)× Price) × Percentage / 100 / DaysPerYear Contract — size of 1 lot
- V (lots) — volume in lots
- Price — current market price
- Percentage — annual percentage
- DaysPerYear — number of days in a year.
- Example calculation of swap for a short position with a volume of 0.1 lots on BTCUSD:
SWAP Short = (1× 0.1 × 57000) × -19 / 100 / 360 = -3.01 USD
