If you leave a trade open overnight, you may notice a small charge or credit, usually a charge, applied to your account. In the financial markets, this is widely known as a "swap" or "rollover."
What is a Swap (Overnight Interest Adjustment)?
A swap is an overnight funding cost or credit. When you trade CFDs with leverage, you are essentially borrowing capital to control a larger trade. Because currencies and commodities are tied to national interest rates, holding a trade overnight requires an adjustment based on the difference in rates.
When Does This Adjustment Happen?
The global forex and CFD markets operate on a 24-hour cycle. The official "end of day" for the trading ecosystem is 5:00 PM New York time.
If you open and close a trade before 5:00 PM NY time, no swap is applied.
If you leave a trade open exactly as the clock strikes 5:00 PM NY time, the swap will be applied to your trade automatically.
Important Note: As explained above, depending on the instrument and the direction of your trade (Buy or Sell), a swap is not always a charge. Sometimes the interest rate differential is in your favor, and you will receive a positive swap (a credit) to your account.