A swap — also called rollover — is the interest you pay or receive for holding a forex position overnight. Hold a trade past the broker's daily cut-off and your balance is adjusted by a small amount, up or down. On a single day-trade it's nothing worth thinking about. On an EA that holds positions for days or weeks, it quietly adds up to a number that shows up in your real results.
What it is
Every currency pair is two currencies, and each currency carries its own central-bank interest rate. When you hold a pair overnight, you're effectively borrowing one currency to buy the other, so you owe interest on one side and earn it on the other. The swap is the difference between those two rates, applied to your position size — plus, in practice, a markup the broker keeps for itself. Buy the higher-yielding currency and the raw rate difference is in your favour; buy the lower-yielding one and it's against you.
How it works
Swap ≈ (interest-rate difference − broker markup) × position size
Swaps are applied at a fixed rollover time, usually 5pm New York time. Anything open across that moment is charged or credited; anything closed before it isn't touched. Whether you pay or receive depends on the direction of the trade and the two interest rates, and it's shown per lot in your terminal's contract specifications.
This is the difference between positive and negative carry. Positive carry means the pair pays you to hold it overnight. Negative carry means it costs you. The broker's markup usually tilts the maths so you pay a little more and receive a little less than the pure rate difference implies.
A worked example
Say you're long one lot of a pair with negative carry, and the swap is −£4.50 a night. Hold it for a single evening and you'll barely notice. Hold it for twenty nights — an ordinary holding period for a swing EA — and that's −£90 bled out of the position before the market has done anything at all. Now flip it: a positive-carry trade paying +£3.00 a night over the same twenty nights adds £60 in your favour. The same strategy can be quietly subsidised or quietly taxed depending only on which side of the interest-rate gap it sits.
Triple-swap Wednesday
One night a week the charge triples. Forex settles two business days forward, so a position held over Wednesday night is booked to settle over the weekend — and the broker charges three days of swap at once to cover Saturday and Sunday. That's triple-swap Wednesday. An EA that reopens trades every evening without accounting for it can hand back three nights of negative carry in one hit, and never flag why Wednesday looks worse than the rest of the week.
Swap-free and Islamic accounts
Swap-free, or Islamic, accounts remove overnight interest for traders whose faith forbids it. There's a catch worth knowing: brokers often replace the swap with a fixed administration fee on positions held past a certain number of days, so "swap-free" isn't always cost-free. On some pairs the fee works out heavier than the swap it replaced, so it's worth checking the actual charge rather than assuming zero.
Why it matters
For any EA that holds overnight, swap is a real cost that decides whether a thin edge survives. It also distorts how results are reported. A profit-and-loss figure quoted before swap and commission always looks better than the balance you actually live with — and vendors selling overnight strategies know it. Watch for performance shown "gross" or "before costs", wide swap markups on market-maker brokers, and swap-free accounts whose admin fees are heavier than the swap they replaced. The honest number is the one net of all of it.
The Karnek note
Karnek reads your figures straight from the terminal, net of costs like swap and commission, so the profit you see is the profit that actually reached the account — not a gross number that ignores overnight interest. It reads read-only and can never place a trade or touch your account.
Written and reviewed by the Karnek Research team. Last updated August 2026.
Educational content only - not financial advice. Past performance does not predict future results. Trading carries significant risk.