Swap is the interest earned or paid by the client if a position is held overnight. SWAPs are executed at 22:00 pm London time. Any positions held by the Client at that time are automatically included in the calculation of SWAP and the result is displayed in the trading account. The amount of interest earned or paid depends on the direction in which the position was opened and the different interest rates of the two currencies. For example, let’s say that the interest rate on the British Pound is much higher than the interest rate on the Japanese Yen, so if a trader is long GBP/JPY (holding the British Pound), he will receive interest on the rollover of the open position. On the contrary, if one is short GBP/JPY (holding the Japanese Yen), interest will be paid.
For currency and precious metals contracts, you can refer to your MT4 trading platform for overnight interest rates as follows:
- Login to MT4 Trading Platform
- Main menu on the top of the platform “Display” – > “List of trading instruments”.
- In the pop-up dialog box, select the type of contract you want to view and left-click on “Properties” on the right side.
- Please check your SWAP in the “Sell/Buy Order Swap Inventory Fee” option.