In CFD trading, another important cost that medium- and long-term traders must consider is Swap, also known as an overnight holding fee. Understanding what swap means and how it is calculated helps traders manage portfolios and evaluate profits and losses more accurately.
What Is Swap and When Is It Applied?
Swap is the interest rate differential between the financial instruments being traded. It is either charged or credited when a trading position is held overnight beyond the server’s rollover time, which is typically 22:00 GMT+0.
Important Swap Conditions Traders Should Know
- Triple Swap: For currency CFDs, a triple swap is applied on Wednesday night to account for holding positions over the weekend when markets are closed.
-
Weekend: No swap is charged on Saturday and Sunday because the market is closed. The cost for these days is already included in the Wednesday triple swap.
How to Check Swap Rates on the MT5 Platform
You can easily view Swap Long (for Buy positions) and Swap Short (for Sell positions) on MT5 by following these steps:
Open the Market Watch window
Right-click on the instrument you want to check
Select Specification
Scroll down to view Swap Long and Swap Short
Swap Calculation Formula
Swap calculation generally consists of two main steps.
Step 1: Calculate Pip Value
Pip Value = (Contract Size × Lot Size) × 10^(–Digits)Step 2: Calculate Total Swap
Swap = Pip Value × Swap Rate × Number of Holding DaysNote: If the position is held over Wednesday night, use Number of Holding Days = 3 due to the triple swap rule.
Example of Manual Swap Calculation
Click here to expand| Item | Value |
| Contract Size | 100,000 |
| Lot Size | 1 |
| Digit | 5 |
| Pip Value | (100,000 × 1) × 10⁻⁵ = 1 USD |
| Swap Long | –1.5935 |
| Swap Short | –3.71 |
| Holding Period | Monday 10:00 → Tuesday 10:00 (server time) |
| Holding Days | 1 day |
Notes |
Swap is charged at 22:00 server time. |
Swap Calculation Example Table
Monday 10:00 → Tuesday 10:00 (Server Time)
- Example 1: Sell 1 Lot
| Calculation Item | Formula / Value | Result |
| Pip Value | (100,000 × 1) × 10⁻⁵ | 1 USD |
| Swap Rate Used | Swap Short | –3.71 |
| Swap Formula | Pip Value × Swap Short × Days | 1 × –3.71 × 1 |
| Swap Result (Sell) | — | –3.71 USD |
Summary: Sell 1 lot held overnight for 1 day → Swap = –3.71 USD
- Example 2: Buy 1 Lot
| Calculation Item | Formula / Value | Result |
| Pip Value | (100,000 × 1) × 10⁻⁵ | 1 USD |
| Swap Rate Used | Swap Long | –1.5935 |
| Swap Formula | Pip Value × Swap Long × Days | 1 × –1.5935 × 1 |
| Swap Result (Buy) | — | –1.59 USD |
Summary: Buy 1 lot held overnight for 1 day → Swap = –1.59 USD
Important Reminder: If you hold an order across Wednesday 22:00 server time, the system applies Triple Swap (×3).
Useful Tip
To reduce complexity and save time, traders are recommended to use the IUX Trading Calculator available on the IUX website. This tool provides fast and accurate swap calculations based on real-time trading conditions.