What is a swap fee and how is it calculated?
Swap fees are the interest charges or credits applied when you keep a position open overnight. These fees can be:
Positive (credit): you earn interest.
Negative (debit): you pay interest.
The value of the swap depends on whether you hold a long or short position on a specific instrument.
Factors that influence swap fees:
The currency pair or instrument you are trading.
The interest rate differential between the currencies involved.
The size of your position and whether it’s long or short.
Example (EUR/USD):
A short position may generate a positive swap fee (you earn interest).
A long position may generate a negative swap fee (you pay interest).
Important note:
Triple swaps are applied on Wednesdays for Forex instruments.
For other asset classes, triple swaps are applied on Fridays.