Swap is a fee that is charged by a broker from the client on the overnight positions. A forex swap is the interest rate differential in the two currency pairs that an investor is trading, and it is determined according to either your position that is long or short.
For instance, if a currency pair has a positive swap value, you are earning interest by holding that position each day. If the swap value is negative, you are being charged that much for holding that position. This is based on the difference in interest between the two currencies in the pair, as well as the current price of that pair.
Vincent Nyagaka is a Professional Trader, Analyst &. He has been actively engaged in market analysis for the past 7 years. He has a monthly readership of 100,000+ traders and has taught over 1,000 students since 2014. Vincent is also an experienced instructor and public speaker. Checkout Vincent’s Professional Trading Course here.