How fast does your broker update swap after a rate decision?

[Fairman]

How fast does your broker update swap after a rate decision?

When a central bank changes rates, the interest rate difference between two currencies changes, and in theory overnight swap should change with it. In practice, brokers update swap rates on their own schedule, and that can lag the actual decision by days.

Some update the next trading day. Some update weekly. A few seem to adjust at irregular intervals. And the swap you're charged isn't purely the rate difference anyway, since brokers add their own markup on both sides.

For a pure intraday scalper this barely matters. If you're flat by rollover, you never pay swap.

It matters if you hold a few days, or if you run an EA that sometimes carries positions overnight. A carry position might suddenly cost more than it used to, or the positive swap you were relying on might shrink. Also triple swap Wednesday multiplies whatever the new rate is.

What I do: after any rate change on a currency I hold, I check the swap figures in the symbol specification over the next few days and see when they move. It's a quick look. If you trade with more than one broker, comparing them after a decision is a fairly good way to see whose swap markup is heavier, because you can see who passes the change through and how much of it.

[Fairman]

Swap is also affected by market funding rates, not just the policy rate. At quarter end or year end, short term funding can spike and some brokers pass that on as a one-off jump in swap for a night or two. It doesn't happen every time, but if you see an odd swap charge around those dates, that might be the reason rather than an error. Your statement should show the rate applied each night if you want to check. Most of the time it's a few cents a lot, so nothing to panic about, but on a big position held for weeks it adds up.

[Fairman]

For EAs that might hold overnight, I'd have the code read the current swap from the symbol info rather than using a fixed value in the settings. Then any position sizing or holding decision uses the real number. It's a small change. Backtests also tend to apply one swap value throughout, which can be far off for periods when rates moved a lot. If your strategy carries positions, I'd run it with a few different swap values to see how sensitive it is. Even a rough sensitivity check tells you whether swap is a rounding error for your system or a real part of the result.