What Is Swap?
When holding certain leveraged positions overnight, you may incur a financing adjustment commonly called swap or overnight financing.
The exact amount depends on:
- Instrument
- Direction
- Position size
- Provider
- Current financing rates
Why Does This Matter?
If you’re a day trader closing positions within the same trading day, overnight financing may be less relevant.
If you’re holding positions for several days or weeks, it becomes much more important.
Important
Never assume the swap is always positive or negative.
Check your provider’s current financing schedule.
Key Takeaways
- Overnight positions can incur financing costs or adjustments.
- Swap varies between instruments and providers.
- Swing traders should understand overnight financing before holding trades.
Disclaimer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
