Reading the swap table: long and short rates and triple Wednesday

[FXS London Scalper]

Most brokers publish swap rates per symbol, listed separately for long and short positions. They are often quoted in points, which makes them hard to interpret without a quick calculation.

A worked example: if the long swap on a pair is -7 points per lot per night, and one point equals a tenth of a pip, the cost is 0.7 pips per lot per night. Over a three-week hold, that is about 15 pips, plus triple charges on Wednesdays to cover the weekend. For a swing trade targeting 60 pips, the swap takes a quarter of the expected gain.

Rates change as interest rates move, and brokers adjust them at different times, so the table should be checked again before long holds.

It is also worth comparing swap levels between brokers, since the markup over interbank rates varies considerably.

Islamic or swap-free accounts usually replace swaps with other fees, which should be compared too.

Do you check swap rates before holding a position for weeks?