Swap (Rollover)
Volume Profile Analysis glossary · Volume Profile Technicals
Definition
The daily interest payment or credit applied to a forex position held across the broker's rollover cutoff, reflecting the interest-rate differential between the two currencies.
Swap (Rollover) in plain English
When you buy one currency using another in forex, you're really borrowing one and lending the other — and money that sits in a bank earns (or costs) interest overnight. The swap, or rollover, is the small daily interest amount your broker adds to or subtracts from your account for holding a trade past a set cutoff time each day (usually around 5pm New York time). Which way it goes depends on the gap between the two countries' interest rates: hold the higher-rate currency and you might get a tiny credit; hold the lower-rate one and you pay a tiny charge. Think of it like renting an apartment while subletting your own room — each night you settle the difference between what you owe and what you're owed.
Also called: Rollover
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