How to Calculate Swap Cost on a Forex Trade

Swap is the overnight financing charge applied to forex positions held past the daily rollover. It can be a credit or a debit depending on the interest rate differential between the two currencies in the pair and the direction of your position. Over time, swap can become a meaningful component of your total trading cost, especially on positions held for several days or weeks.

This guide covers what swap is in forex, when swap is applied at TIOmarkets, where to find swap rates inside MT4, how to calculate the cost using a worked example, the difference between positive and negative swap, and the practical considerations involved.

What Is Swap in Forex?

When you hold a forex position past the daily rollover, the broker applies a swap charge. The charge reflects the interest rate differential between the base currency (which you effectively borrow) and the quote currency (which you effectively lend) when you are long, and the reverse when you are short. The broker also applies its own funding cost on top.

Swap can be positive or negative. If the interest rate on the currency you are effectively lending is higher than the rate on the currency you are effectively borrowing, the differential favours your position and swap can be a credit. If the differential goes the other way, swap is a debit. The broker's funding cost usually pushes the net swap toward a debit on both sides of most pairs.

Swap is applied per night per lot. A larger position incurs a larger swap charge in absolute terms. A position held longer incurs more swap charges in total.

When Swap Is Applied at TIOmarkets

At TIOmarkets, forex swap is credited or debited at 22:00 GMT each trading day. Any position open at that moment is subject to swap; positions opened and closed within a single trading day before 22:00 GMT do not incur swap.

Wednesday is the triple swap day for forex. The swap charged at 22:00 GMT on Wednesday is three days' worth of swap, accounting for the weekend. This is because the value date of a Wednesday trade rolls over the weekend before settling. Other days of the week charge a single day of swap at 22:00 GMT.

Specific swap rates for any instrument are not published on the TIOmarkets swaps page; the page directs you to check inside the platform. Swap rates change over time as interest rate differentials shift and as broker funding conditions change, so the only reliable source is the live value shown in MT4.

How to Find Swap Rates in MT4

To see the current swap rate for any instrument in MT4, open the Market Watch window using Ctrl+M. Right-click the symbol you want to check, and select "Specification" from the context menu.

The Specification dialog shows all the contract details for that symbol, including two fields labelled "Swap long" and "Swap short." These values are the current swap rates: the rate applied to long positions per night per lot, and the rate applied to short positions per night per lot.

The unit shown for these values is typically points. Some configurations display swap directly in the account currency. If you are unsure, the Specification dialog also shows the "Swap type" field, which indicates the calculation method (Points, Money in margin currency, Money in client deposit currency, or Interest, depending on broker settings).

The values change over time. Always check the current rate before opening a position you plan to hold overnight.

How to Calculate Swap Cost

When the swap rate is shown in points, the cost is calculated using the following formula:

Swap charge in account currency = Swap rate in points × Point value per lot × Number of lots × Number of nights held

The point value per lot depends on the instrument and the account currency. For USD-quoted pairs on a USD account, the point value on a standard lot is USD 1 (one tenth of the pip value of USD 10). For other pairs and account currencies, the point value requires a conversion. The TIOmarkets Pip Value Calculator returns the pip value for any pair and account currency; the point value is one tenth of the pip value.

Worked Example (Standard Lot EURUSD, USD Account)

Assume the following illustrative figures:

• Pair: EURUSD
• Account currency: USD
• Position: 1.0 standard lot, long
• Swap long rate: -2.5 points per night per standard lot (illustrative)
• Point value: USD 1 per point per standard lot (USD account, USD-quoted pair)

Daily swap charge = -2.5 points × USD 1 per point × 1.0 lots = -USD 2.50 per night.

Held for one week, opening Monday and holding through to the following Monday, with Wednesday triple swap:

• Monday 22:00 GMT: -USD 2.50
• Tuesday 22:00 GMT: -USD 2.50
• Wednesday 22:00 GMT: -USD 7.50 (three days' swap)
• Thursday 22:00 GMT: -USD 2.50
• Friday 22:00 GMT: -USD 2.50
• Saturday and Sunday: no swap event
• Total over seven calendar days: -USD 17.50

The same calculation works for shorter or longer hold periods. Multiply the daily charge by the number of swap events, remembering to count Wednesday as three days.

For a short position on the same pair, you would use the "Swap short" rate instead of "Swap long." The two values are usually different in magnitude and may be different in sign.

Positive vs Negative Swap

Swap is sometimes positive (a credit) and sometimes negative (a debit). The sign depends on the interest rate differential between the two currencies and the direction of your position, modified by the broker's funding cost.

A currency carry trade is built on the idea of holding the higher-yielding currency long against a lower-yielding currency, collecting positive swap each day the position is open. Whether positive carry is available on any specific pair at TIOmarkets depends on current rates and is best checked in-platform via the Specification dialog.

The Specification dialog will show a positive number for any positive swap (credit) and a negative number for any negative swap (debit). Read these carefully; a misread can lead to unexpected costs on a position you expected to be carry-positive.

Practical Considerations

Swap is calculated per lot. Larger positions incur larger swap costs in absolute terms; smaller positions incur smaller costs. The percentage cost relative to position size is the same.

Swap is applied at 22:00 GMT regardless of when during the trading day you opened the position. A position opened at 21:55 GMT and held past 22:00 GMT will incur a full day's swap, even though you held it for only five minutes. This is the standard MetaQuotes behaviour.

For non-forex instruments such as indices, commodities, and crypto CFDs, overnight financing is generally calculated on a different basis from forex triple swap. Check the Specification dialog for the specific instrument to see the rate and the calculation method.

A swap-free Islamic account is available at TIOmarkets. Contact TIOmarkets for eligibility and instrument requirements. Islamic accounts apply no swap charges on the instruments covered, although other administration fees may apply in lieu of swap depending on the agreement.

At TIOmarkets, the unlimited leverage feature on Standard MT5 accounts applies to symbols with a "un" suffix in MT5. No positive swaps are credited on unlimited leverage symbols.

Demo accounts often execute instantly and may not fully replicate live slippage conditions. Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements.

Trading at TIOmarkets

TIOmarkets offers MetaTrader 4 and MetaTrader 5 on desktop, web, and mobile, across four account types. The Standard account is created automatically on registration with a minimum deposit of $20 or currency equivalent. The Raw and VIP Black accounts are opened separately through the client area. The Nano account is MT5 only with a $20 minimum deposit, USD only. Hedging is supported on all accounts. A swap-free Islamic account is available; contact TIOmarkets for eligibility and instrument requirements. Copy trading is available on both MT4 and MT5.

Orders are executed at the best available market price, which may result in positive or negative slippage. Demo accounts often execute instantly and may not fully replicate live slippage conditions. Spreads are variable and are typically higher than minimum figures shown. Leverage on each instrument is subject to change depending on market conditions and applicable regulatory requirements. You can review the full list of account types on the TIOmarkets accounts page.