Counting Swap Nights on a One-Week Hold

[Fairman]

Counting Swap Nights on a One-Week Hold

Scenario: you buy 0.40 lots of a pair whose long swap is minus 6.50 dollars per standard lot per night. You open on Monday morning and close the following Monday morning, before the rollover that day. How much swap do you pay?

Work it out. Rollover happens at the end of each trading day. Nights charged: Monday, Tuesday, Wednesday, Thursday, and Friday. Wednesday carries triple swap, because it covers the weekend settlement shift. So the units charged are 1 for Monday, 1 for Tuesday, 3 for Wednesday, 1 for Thursday, and 1 for Friday, a total of 7.

Swap per standard lot: 7 times 6.50 is 45.50 dollars. At 0.40 lots: 18.20 dollars.

Compare with a trader who holds from Thursday morning to Monday morning: nights charged are Thursday and Friday, 2 units, so 5.20 dollars at the same size. The Wednesday rollover is the expensive one, so a position opened on Thursday avoids it.

For a position with a positive swap, the same count works in your favor, with Wednesday paying triple.

Check your broker's swap calendar, as the triple day can differ for some instruments, and holidays shift the count.

Over a year, a trader holding positions continuously at minus 6.50 per lot per night would pay about 6.50 times 365, roughly 2,372 dollars per lot. That is a large drag, so swap should enter your trade planning.

Takeaway: count the rollover units, remembering the triple day, before holding trades overnight.

Practical step: calculate the swap cost of holding your usual position for five trading days on your platform's rates.

[FXS HongKong Scalper]

Correct count. Two small things that sometimes confuse people. First, brokers differ on which day carries the triple swap. Most FX pairs use Wednesday, but some CFDs and metals apply it on Friday. Second, if a holiday falls inside the week, the settlement shift can move the extra day, and some brokers add it to another night.

So the safest approach is to check the swap table and the broker's calendar for the specific week rather than assuming seven units every time.

[Fairman]

The count of seven units is correct for a full Monday to Monday hold. Five rollovers, with Wednesday counting triple to cover the weekend settlement, give seven units. At minus 6.50 dollars per standard lot, that's 45.50 dollars per lot, or 18.20 dollars at 0.40 lots. The Wednesday triple exists because spot forex settles two business days after the trade date. A position held through Wednesday's rollover has its settlement moved from Friday to the following Monday, so it carries three days of financing in one night, covering the weekend.

[Amanhasnoname]

Counting the nights is easy until a holiday sneaks in, which is how I got caught. I held a short on a cross over a week that included a bank holiday on Monday, and my statement showed the triple charge on a Thursday, not the Wednesday I had planned around. The difference was small in dollars, but it taught me to read the swap calendar for that specific week.

I now keep a short sheet on my desk with the swap rate per lot for the pairs I hold, both long and short, since they are rarely symmetrical. On one commodity linked pair the short side paid me a few cents a night while the long side cost nearly a dollar, which changed which direction I preferred for a carry hold.

As the reply above said, metals and some indices use Friday for the triple day, and that is true on my platform too. Before any hold over two nights I open the contract specification and check, because it takes one minute.

[Fairman]

The Thursday to Monday comparison shows how much timing matters. Holding from Thursday morning avoids the Wednesday triple, paying only two units, 5.20 dollars at 0.40 lots. That's less than a third of the full week's cost. For a trader with a negative swap position and some flexibility on entry timing, opening after the Wednesday rollover can save a noticeable amount. For a positive swap position, the reverse applies: holding through Wednesday night earns three units. Neither should drive the trade decision, but both are worth knowing when the choice is otherwise neutral.

[Fairman]

The annual figure of about 2,372 dollars per lot puts the cost in perspective. For a trader holding positions continuously, swap is a significant ongoing expense. On a 10,000 dollar account with one standard lot held all year, that's over 23 percent of the account, which would make most strategies unprofitable. Even at 0.10 lots, it's about 237 dollars, or 2.4 percent of the account. Swing and position traders should include swap in their expectancy calculations, as the full cost thread shows, since ignoring it can turn a profitable strategy into a losing one.

[Fairman]

Checking the broker's swap calendar, as suggested, is worth doing for each instrument traded. Some CFDs on indices or commodities apply triple swap on Friday rather than Wednesday, since they settle differently. Holidays in either currency's country can shift the triple day or add extra units. Rollover times also vary slightly between brokers, usually around 23:00 WAT in winter and 22:00 WAT in summer, aligned to the New York close. Has anyone here been surprised by a swap charge that was larger than expected? Sharing the cause would help others plan their holding periods more carefully.