What is a swap?
Swap, also known as rollover, is a commission that a trader either receives or pays for holding a position open overnight. This financial instrument plays a significant role in currency trading and can greatly impact trading outcomes.
There are two types of swaps:
Swap long: Applied for holding a buy position overnight.
Swap short: Used for holding a sell position overnight.
The cost of the swap is expressed in pips per lot and depends on the financial instrument being traded. For example, on the Alpari platform, you can review the current swap rates for each symbol on the contract specification page.
A negative swap value indicates that holding the position open overnight will deduct the swap amount from the trader's account, while a positive value indicates the accrual of the swap to their account.
When calculating the swap cost, the following points should be taken into account: For currency pairs and metals, position rollover from Wednesday to Thursday involves triple calculation of the swap cost. Similarly, for positions on USD/CAD, USD/TRY, EUR/TRY, rolled over from Thursday to Friday, triple calculation of the swap cost is applied. When rolling over CFD positions to the next day, from Friday to Monday, triple calculation of the swap cost is also used.
The formula for calculating the swap cost for currency pairs, metals, and CFD instruments is as follows:
SWAP = Number of lots × Pip cost per lot × Swap rate × Number of nights
Example:
Currency Pair: EUR/USD
Number of lots: 1 lot
Pip cost per lot: $10 (typical for standard lot on EUR/USD)
Swap rate: -1.5 (negative means you're paying swap)
Number of nights: 3
Swap = 1 lot × $10 × (-1.5) × 3 nights = -45
The formula for calculating the swap cost for cryptocurrencies:
SWAP = (Contract × V (lots)× Price) × Percentage / 100 / DaysPerYear,
where: Contract — size of 1 lot
V (lots) — volume in lots
Price — current market price
Percentage — annual percentage
DaysPerYear — number of days in a year.
Example calculation of swap for a short position with a volume of 0.1 lots on BTCUSD:
SWAP Short = (1× 0.1 × 57000) × -19 / 100 / 360 = -3.01 USD.
Note that swap accrual or deduction occurs at a specific time, usually between 23:59:45 and 23:59:55 server time.
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