A swap (rollover fee) is interest credited or debited when you hold a forex position open past the daily rollover time (typically 17:00 EST). It reflects the interest-rate differential between the two currencies in the pair. Hold past midnight server time and you either earn (positive carry) or pay (negative carry) interest.

FX trades settle on T+2 (two business days after the trade date). The market is closed on weekends, so a position held over Wednesday actually settles on Friday, covering Saturday and Sunday too. To compensate for that 3-day gap, brokers charge or credit 3× the normal nightly swap on Wednesday night.

Positive carry = you receive swap because you bought the higher-yielding currency (e.g. short USD/JPY when JPY rates are below USD rates). Negative carry = you pay swap because you bought the lower-yielding currency. Long-held positions on negative-carry pairs erode profits steadily.

Yes, with a swap-free (Islamic) account, available at most major brokers. These accounts charge no rollover interest in compliance with Sharia law. Trade-offs: many swap-free accounts have wider spreads or daily admin fees that effectively replace the swap on long holds. Day traders who close before rollover also avoid swap.

Swap rates derive from the interbank interest-rate differential between the two currencies, plus a broker margin. They change when central banks adjust policy rates (Fed, ECB, BoJ, etc.), so swap rates that were favorable last quarter may flip. Always check current rates on your broker's platform before sizing a long-hold trade.

Yes — for swing/position trades held more than a few days, swap can become a meaningful portion of P&L. A 1-lot EUR/USD position paying $4/night negative swap costs $80 over 20 trading days, plus ~$8 extra each Wednesday. Add expected total swap to your stop-loss budget and break-even calculation.