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How do I calculate swap fees?

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Question
How do I calculate swap fees?

Answer

Swap is the fee charged for holding a position open overnight. It refers to the interest rate difference between the two traded currencies and is determined according to whether your position is long or short. Swaps are calculated and applied on every trading night. On Wednesday night swaps are charged at triple rate to account for the weekend*.

 

For Forex, the Swap Calculator works as follows:


Swap Rate (in pips) × Lots (Volume) = SWAP debit/credit in second currency

 

Swap (in pips) - It can be either a positive or negative number that is based on interest rates. Swap rates are also different for long and short positions. So, if you placed a long position (buy) you will make the calculations with the Swap long rate and if you placed a short position (sell) you will use the Swap short rate.
Lots
— the order volume

 

Example:

 

1) Trading 1 lot of EUR/USD (short) with an account denominated in EUR

1 lot: 100,000
Swap rate: 3.36


Swap short fee: 3.36 * 1 = 3.36 USD

 

Since your account is in another currency, for example in this case in EUR, you have to divide by the EUR/USD exchange rate:
We are using the EUR/USD currency pair to find the exchange rate. Please note EUR/USD rate is; 1 USD = 1.0797 EUR, therefore as we are converting to EUR, we divide:
3.36/1.0797 = 3.11 EUR


2) Trading 2 lots on AUD/USD (long) with an account denominated in USD


2 lots: 200,000
Swap long rate: – 4.88


Swap fee: – 4.38*2= -9.76 USD

 

IMPORTANT!

* Please note that when you roll an open position from Wednesday to Thursday on a trade date basis, the Monday of the following week becomes the new value date, not the Saturday. Therefore, the rollover charge on a Wednesday evening will be three times the value indicated in the table. 

 

You can find the updated swap fees on our website here: https://en.myfxchoice.com/faq/rollover-policy/, or on the MT4 platform by going to the Market Watch window > right click on the symbol you want to check > select Properties. 


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Views: 96 Created on: Feb 18, 2020
Date updated: Feb 19, 2020

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