What is a Forex Swap Rate?

January 25, 2014

What is a spot swap rate or rollover rate?

Forex spot swap rates, also referred to as rollover rates, are charged or earned to positions left open overnight. When trading Forex and precious metals, all trades will settle two business days from date of entry, as per market convention. Vantage FX is not involved in the physical delivery of trades, thus all positions left open at the end of the trading day will be rolled over to a new value date and will therefore have exposure to a swap charge or credit.

Please note: For trades held open from Wednesday to Thursday as per server time, the new value date becomes Monday, rather than the weekend. This means the rollover charge on a Wednesday evening will be three times the usual value.

To see examples of rollover rates on trades, please see our Index & Commodity Rollover Examples sheet.

How are swap rates determined?

Swap rates are affected by market conditions and the interest rate of the affiliated countries of the chosen currency pair. The daily released rates are calculated by our financial institutional partners using risk-management analysis.

Each currency pair has its own swap charge. Interest is paid on currency sold and received on currency bought.

How do I get the most up-to-date swap rates?

For live swap rates, please refer to the Market Watch panel in MetaTrader 4 (MT4) platform.

Simply follow the steps outlined below:

  • Right click anywhere in the Market Watch window, and select ‘Symbols’
  • Select the product you wish to view from the list. Select ‘Properties’
  • Here you can view the swap rates for both long and short positions

 

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