Home » Swap

Swap

« Back to Glossary Index

Last Updated on: 14th February 2021, 11:22 pm

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.

Related
Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

Kathy Lien

Kathy Lien is an expert in global currencies, author, and Managing Director of BK Asset Management. For retail FX traders back Read more

European Parliament

The European Parliament is the European Union’s law-making body. It is directly elected by EU voters every 5 years. It is a Read more

Open Position

An active trade that has yet to be closed.

« Back to Glossary Index