Overnight FX Positions: How Rollover, Swap Rates and Carry Work

The cost that arrives while you sleep

Most costs in trading announce themselves. A spread shows up the moment you click. A commission appears on the ticket. Overnight financing is different. It accumulates quietly, one night at a time, and only becomes visible when you look at your statement and wonder where that small daily deduction came from.

In foreign exchange, this is usually called rollover, swap, or the overnight financing rate. The idea is simple: a currency pair is really two interest rates stitched together. When you hold a position past your broker's daily cut-off, one currency is effectively held and the other effectively owed. The interest rate difference between them — adjusted by the broker — is credited or debited to your account.

That adjustment matters. Broker swap values are not the same as central bank policy rates. They are tradeable market rates with a markup built in, which is why a pair can cost you money in both directions when the interest gap is thinner than the markup.

Why the market needs rollover at all

Spot FX settles on a T+2 basis, meaning a trade is normally finalised two business days later. If you want to keep a position alive beyond that, someone has to roll the settlement date forward. The broker does this automatically by closing the spot position at the daily close and reopening it as a forward contract for the next day.

That mechanical roll is why the charge exists. It is not a penalty invented by your platform; it is the price of extending settlement. The size of that price depends on the two interest rates, your position size, the pair, and the broker's own terms.

This is also where the word "carry" comes from. A carry strategy deliberately holds a currency with a higher interest rate against one with a lower rate, aiming to collect the positive rollover while accepting currency risk. IG describes this as the essence of carry trading. It is worth saying plainly: carry is not free income. The interest you collect can vanish quickly if the exchange rate moves against you, and rates change.

The Wednesday triple, explained without drama

Banks close on weekends, but interest does not stop. To account for Saturday and Sunday, the FX market typically books three days of financing at one rollover during the week. For most FX pairs, that triple day falls on Wednesday, covering the Wednesday-to-Thursday rollover.

Why Wednesday? Because of the T+2 settlement cycle. A position rolled on Wednesday settles on Friday, so the broker must account for the weekend days that follow. As b2prime puts it, the swap is tripled to compensate for those two extra days.

Two practical cautions. First, the triple day is a per-symbol setting, not a universal law. MetaTrader's own documentation treats it as a symbol property, so a particular instrument can differ. Second, the cut-off time is set in the broker's server clock, not yours. If you are watching a chart in another timezone, convert carefully before assuming you are safely on one side of the line.

There is a small mercy here: a trade opened and closed within the same trading day pays no swap at all. Intraday strategies largely sidestep the whole subject.

Holidays, and the four-day surprise

Public holidays create their own adjustments. When a major holiday closes banks in one of the pair's currencies, an extra day of rollover is usually applied about two business days before the holiday. IG gives the example of US Independence Day on 4 July: an extra day of rollover is added at 5pm ET on 1 July for US dollar pairs.

If that adjustment lands on a weekend, it can get pushed to the following Wednesday, which may mean four or five days of interest charged at once. A trader holding a position through a quiet holiday week can therefore find a noticeably larger deduction than the previous week's pattern suggested. This is not a malfunction. It is settlement plumbing doing its job.

Worth noting: these conventions are market practice, not a single global rulebook. Broker terms, cut-off times and holiday calendars vary by jurisdiction and by instrument, so the specific numbers on your account are the ones that count.

What the plumbing looks like in practice

In MetaTrader 4 and MetaTrader 5, each symbol's Specification window lists a swap value for long positions and one for short positions, plus a swap type that determines the unit. In points mode, a figure like −8.0 means eight points of the pair's price, not eight dollars. Multiply by point size, contract size and lots to get money. In percentage mode, the calculation runs off the position's value using a 360-day bank year, per MQL5 documentation.

This is the sort of detail that punishes assumption. A number that looks like a small currency amount may actually be a points value, and vice versa. Reading the swap type before doing arithmetic is the equivalent of checking whether a recipe means teaspoons or tablespoons. Both are small spoons. Only one ruins dinner.

Swap-free or Islamic accounts exist for traders who cannot pay or receive interest for religious reasons. But swap-free does not always mean cost-free: some brokers replace the swap with a per-lot handling fee after a grace period. Read the terms on the specific account.

Why this matters more than it seems

For a swing trader holding for weeks, rollover is not a rounding error. Consider an illustrative example: a half-lot position with a swap of −8 points per night, where a point is worth fifty cents, costs four dollars a night. Over four weeks, that is twenty-eight nights of financing — over a hundred dollars, before spread or commission.

Financing also shifts the math on how often a strategy needs to win. Add a steady overnight cost to every trade and the break-even win rate creeps up, quietly. Nothing in the chart changes; the hurdle does.

And swap is not fixed. IG notes that rollover rates can swing sharply when interbank markets are stressed, and a credit today can become a charge later. A positive swap is a term in your cost budget, not a reason to hold a position.

The bigger picture

None of this operates in a vacuum. The Bank for International Settlements' 2025 Triennial Survey put global OTC FX turnover at $9.6 trillion per day in April 2025, up 28% from three years earlier. FX swaps alone averaged $4 trillion daily, and the BIS notes they are predominantly short-maturity instruments of up to seven days, widely used to manage funding liquidity. Overnight financing is, in a real sense, the retail edge of a very large institutional market.

The April 2025 survey period was also unusually volatile. The BIS attributed a surge in hedging activity to US tariff announcements and a dollar depreciation, with roughly $1.5 trillion of that month's turnover linked to those extraordinary effects. In stressed conditions, funding costs can move too.

The practical takeaway is unglamorous but useful: know your cut-off, know your triple day, check the calendar for holidays, and treat the swap column as part of your cost of doing business rather than background noise. It will not make anyone rich. It will stop small leaks from becoming a slow, confusing drip.