The swap, also known as a rollover, is a type of interest charged on positions held overnight on forex instruments and Contracts For Difference (CFDs). The charge is applied to the nominal value of an open trading position overnight.
Depending on the swap rate and the position taken on the trade, the swap value can be either negative or positive. In other words, you will either have to pay a fee or be paid a fee for holding your position overnight. In addition, we also must take into account that this commission could be charged three times on a Friday or Wednesday, depending on each instrument involved.
Factors that affect the exact calculation of the swaps include:
The difference between the current interest rate of each country
The price movement of the currency pair
The behaviour of the forward market
The swap points of the broker or liquidity provider counterparty
Examples include:
1. Forex:
The open position of 2 lots in EURUSD:
Swap Value (Long), Pips in Contract Specifications = -0.688
Swap Value (Short), Pips in Contract Specifications = -0.063
Please note that 1 pip is equal to 0.00010
Contract value: 1 lot = 100,000 EUR
3-days swap on Wednesday
Swap Calculation:
Option 1:
Swap Value (Long) = notional value * swap = volume * contract size * Swap = (2 * 100,000) * (-0.0000688) = - 13.76 USD
Swap Value (Short) = notional value * swap = volume * contract size * Swap = (2 * 100,000) * (-0.0000063) = - 1.26 USD
Option 2:
Swap (long) = 1 pip value * Swap value
1 pip = 2 *100,000 * 0.0001 = 20 USD
Swap = 20 *( -0.688) = -13.76 USD
Swap (short) = 1 pip value * Swap value
1 pip = 2 *100,000 * 0.0001 = 20 USD
Swap = 20 *( -0.063) = -1.26 USD
2. Indices:
The open position of 10 lots in Germany40
Swap Value (Long), Daily interest rate in Contract Specifications = -0.00681%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -2.45% (annual)
Swap Value (Short), the daily interest rate in Contract Specifications = -0.0986%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -3.55% (annual)
Daily swap = annual swap / 360
Please note that for this example Germany40 quotes at 15,000 points
Please note that 1.00 point in Germany40 is equal to 1.00 EUR
3-days swap on Friday
Example with daily swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (10*1*15000) * (-0,0000681) = - 10,215 EUR
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (10*1*15000)*(-0,0000986) = - 14.79 EUR
Example with annual swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (10*1*15,000)* (-2.45/100/360) = -10,215 EUR.
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (10*1*15,000)* (-3.55/100/360) = -14.79 EUR.
3. Commodities
- Example with Gold
Open position of 1 lot in GOLD (100 oz)
Swap Value (Long), Pips in Contract Specifications = -9,916
Swap Value (Short), Pips in Contract Specifications = -5,817
Please note that 1 pip is equal to 0.010 and the difference between 1801,000 - 1800,000 = 1 USD, so the value of 0.010 is equal to 0.01 USD.
3-days swap on Wednesday
Swap Value (Long) = Volume * Contract size * Swap = 1 * 100* (-0.09916) = - 9,916 USD
Swap Value (Short) = Volume * Contract size * Swap = 1 * 100* (-0.05817) = - 5,817 USD
- Example with Brent
The open position of 1 lot in BRENT (100 barrels)
Swap Value (Long), Daily interest rate in Contract specifications = -0.00231%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -0,83% (annual)
Swap Value (Short), the daily interest rate in Contract specifications = -0.01975%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -7,11% (annual)
Daily swap = annual swap / 360
Please note that for this example Brent quotes at 67.00 USD
Please note that 1.00 point in Brent is equal to 1.00 USD
3-days swap on Friday
Example with daily swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap= (1*100*67.00)*(-0.0000231) = - 0.15477 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (1*100*67.00)*(-0.0001975) = - 1.32325 USD
Example with annual swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price)* Swap= (1*100*67.00)* (-0.83/100/360) = - 0.15477 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price)* Swap= (1*100*67.00)* (-7.11/100/360) = - 1.32325 USD
4. CFDs on Stocks
The open position of 10 lots in Apple
Swap Value (Long), Daily interest rate in Contract specifications = -0.01686%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -6.08% (annual)
Swap Value (Short), the daily interest rate in Contract specifications = -0.01644%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -5.92% (annual)
Daily swap = annual swap / 360
Please note that for this example Apple quotes 125 USD
Please note that 1.00 point in Apple is equal to 1.00 USD
3-days swap on Friday
Example with daily swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (10*1*125.00)*(-0,0001686) = - 0.21075 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (10*1*125.00)*(-0,0001644) = - 0.2055 USD
Example with annual swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (10*1*125.00)* (-6,08/100/360) = - 0.21075 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (10*1*125.00)* (-5,92/100/360) = - 0.2055 USD
5. Digital currencies
The open position of 1 lot in BTCUSD
Swap Value (Long), Daily interest rate in Contract Specifications = -0.08333%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = -30% (annual)
Swap Value (Short), the daily interest rate in Contract Specifications = 0.02778%
Please take into account that if we check this information on the trading platform, we will find it on an annual basis. Swap in MetaTrader = 10% (annual)
Daily swap = annual swap / 360
Please note that for this example BTCUSD quotes at 40,000 USD
Please note that 1.00 point in BTCUSD is equal to 1.00 USD
3-days swap not charged
Example with daily swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (1*1*40,000) * (-0.0008333) = - 33,332 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (1*1*40,000) * (0,0002778) = 11.11 USD
Example with annual swap:
Swap Value (Long) = notional value * swap = (volume*contract size*price) * Swap = (1*1*40,000)* (-30/100/360) = -33,332 USD
Swap Value (Short) = notional value * swap = (volume*contract size*price) * Swap = (1*1*40,000)* (10/100/360) = 11.11 USD
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