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Swap (Rollover)

Forex Basicsintermediate
Updated 1/15/2024

Definition

Swap or rollover is the interest paid or earned for holding a position overnight. It's based on the interest rate differential between the two currencies in a pair. You earn swap if you're long the higher-yielding currency.

Example

If you're long AUD/JPY and Australian rates are higher than Japanese rates, you earn positive swap. If rates are lower, you pay negative swap.

Tags

#basics#interest#overnight
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