Charge of Swap


Recommended prerequisite reading

What is Swap?

Swap is also commonly known as the rollover fee.

It is charged when a position is kept open overnight, through the “end of day”.

The “End of Day”

The “End of Day” is affected by Daylight Saving Time (DST):-

  • 21:00 GMT during Summer Time (DST)
  • 22:00 GMT during Winter Time

At the time of this writing is made, it is Summer Time, Daylight Saving Time (DST) is in effect, therefore this article assumes 21:00 GMT is the end of day.

The image above illustrate the number of days of swap will be charged when you rollover your position to the next day i.e. passing the horizontal dotted red lines.

Orders passing the End of Day

For instance, if your order is opened before 21:00 GMT and closed after 21:00 GMT on the same day, rollover will happen, swaps will be charged.

Trade open time: Monday, 2020-04-06 20:59:59
Trade close time: Monday, 2020-04-06 21:00:01
Swap charged: 1 day

Orders not passing the End of Day

However if your order is opened after 21:00 GMT and closed before 21:00 GMT of the next day, rollover will not happen, swaps will not be charged.

Trade open time: Monday, 2020-04-06 21:00:01
Trade close time: Tuesday, 2020-04-07 20:59:59
Swap charged: none

HENCE, this concludes that swaps will only be charged to positions which remain open passing the “End of Day”.

Swap in Points

There are few method how swap is calculated, among the common is charge in “point”.

To understand how rate is charged and at what rate you will be charged, from your Market Watch panel, right click the instrument you are interested and click “Specification’.

You will find the following three attributes:-

  • Swap type – the method of how rate is calculated
  • Swap long – the rate of charge for rollover buy positions
  • Swap short – the rate of charge for rollover sell positions
  • 3-days swap – the night when threefold swap is charged

When the rate is negative, charge is debited from your account upon rollover.
When the rate is positive, charge is credited to your account upon rollover.

Attention: Rates of swap are subject to change from time to time.

The charge of swap can be calculated as followed:-

Swap = Volume × Swap × PointSize

Threefold swap

Also known as the 3-days swap.

The 3-days swap is used for deals, the payments for which fall on weekends.

For example, Wednesday is the threefold swap day for spot Forex deals (settled at the second business day after the transaction). On this day, the swap for Thursday, Saturday and Sunday is charged (the market is closed on the latter two days).

Cumulative of Charge of Swap

Charge of swap is accumulated across each night when the position is kept open.

If you open a position on Monday and close it on Wednesday on the same week, then a total of 2 days swap will be charged.

If you open a position on Wednesday and close it on Friday on the same week, then a total of 4 days swap will be charged.

If you open a position on Monday and close it on Monday on the week followed, then a total of 7 days swap will be charged.

Useful links

https://www.tfxi.com/trading/trading-hours