Swap / Rollover

Swap is not a fee the broker invented to annoy you. It falls out of how spot FX settles. ### Why it exists Spot FX settles T+2, two business days after you deal. If you are still holding when the broker's rollover point arrives, that settlement date has to be pushed forward another day, and the two currencies in your pair carry different interest rates. Pepperstone's own swap guide states the trigger plainly: hold a position past the set rollover time of 5pm New York time and you pay or earn the tom next charge on your nominal position. Tom next (tomorrow against next day) is a genuinely traded instrument in the interbank market, which is why the number drifts with rate expectations instead of sitting still. Direction follows the differential. Hold the higher-yielding currency against the lower-yielding one and the raw carry runs in your favour. Hold it the other way round and you are the one paying it. Note the word *nominal*. Swap is applied to the full position size, not to the margin you put up. Leverage does not shrink the charge, it magnifies it relative to your deposit. ### Reading the two numbers Every broker publishes a swap table with a long rate and a short rate for each instrument, and they are not mirror images. In Pepperstone's worked example on EURUSD at 1.1290, one standard lot carries a long swap of -11.49 and a short swap of +7.02, which they translate into roughly 10.18 euros debited per night if you are long, and roughly 6.22 euros credited per night if you are short. The gap between those two numbers is the broker's markup on the raw differential. That gap is why, on pairs whose interest rates sit close together, both sides can print negative and you pay to hold the pair whichever way you sit. ### The Wednesday triple Because settlement is T+2 and the weekend is not a settlement window, a position carried past 5pm New York on Wednesday rolls its value date across Saturday and Sunday. Three days of interest get applied in one hit. It is accounting, not a penalty, and it cuts both ways: a position on the credit side of the table collects triple on the same night. Brokers list the triple day per instrument in the same swap table, so check it for what you actually trade rather than assuming. ### Where it bites Intraday it is noise, which is exactly why it is so easy to ignore. Over a multi-week hold it is a fixed, one-directional drip on the notional, charged whether the trade is winning, losing, or going nowhere. The "I will just hold until it comes back" trade quietly pays rent the whole time.