Swap Calculator
Calculate swap with our free Swap Calculator. Compare rates, see projections, and make informed financial decisions. Free to use with no signup required.
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The daily swap charge or credit equals the lot size times the contract size times the swap rate in points times the point value. This is multiplied by the number of days held, with an extra 2 days added for each Wednesday rollover (triple swap) to account for the weekend.
Last reviewed: December 2025
Worked Examples
Example 1: EUR/USD Long Position — 7 Days
Example 2: AUD/JPY Carry Trade — 30 Days
Background & Theory
The Swap Calculator applies the following established principles and formulas. Foreign exchange markets facilitate the conversion of one currency into another and serve as the largest and most liquid financial markets in the world, with daily turnover exceeding seven trillion US dollars. Exchange rates are quoted as currency pairs, expressing the price of one unit of a base currency in terms of a quote currency. For example, a EUR/USD rate of 1.0850 means one euro buys 1.0850 US dollars. The smallest standardized price movement in most pairs is the pip, typically the fourth decimal place, with a value of 0.0001 per unit for USD-denominated pairs. The bid price is the rate at which a dealer will buy the base currency, while the ask price is the rate at which it will sell. The spread between bid and ask represents the dealer's compensation and varies with liquidity and volatility. Leverage amplifies both gains and losses by allowing traders to control positions larger than their deposited margin. A 100:1 leverage ratio means a one-percent adverse move eliminates the entire margin, making position sizing and risk management critical. Two parity conditions from international economics anchor exchange rate theory. Purchasing Power Parity (PPP) holds that exchange rates should adjust over time so that identical goods trade at equivalent prices across countries: S = P_d / P_f, where S is the spot rate and P_d and P_f are domestic and foreign price levels. PPP performs well over long horizons but poorly in the short run due to trade barriers, non-tradable goods, and capital flows. Covered Interest Rate Parity (CIRP) is a near-arbitrage condition stating that forward exchange rate premiums or discounts exactly offset interest rate differentials between two currencies: F/S = (1 + r_d) / (1 + r_f). Deviations from CIRP create riskless arbitrage opportunities that traders rapidly eliminate. Uncovered Interest Rate Parity posits that high-yielding currencies should depreciate to offset their interest advantage, though empirical evidence is mixed and the carry trade — borrowing in low-rate currencies to invest in high-rate ones — has generated persistent returns.
History
The history behind the Swap Calculator traces back through the following developments. For much of the nineteenth century and early twentieth century, the international monetary system operated under the classical gold standard, under which each participating currency was fixed to a defined weight of gold, making bilateral exchange rates effectively constant. The system provided price stability and facilitated global trade but constrained governments' ability to respond to economic downturns. World War One shattered the gold standard as nations suspended convertibility to finance wartime expenditures. The interwar period saw attempts to restore gold convertibility, most notably the British return to the gold standard in 1925 at the pre-war parity, a decision criticized by John Maynard Keynes as deflationary. The Great Depression forced widespread currency devaluations and the effective collapse of the international gold standard by the early 1930s. The Bretton Woods Conference of July 1944 established a new order in which member currencies were pegged to the US dollar, while the dollar alone was convertible into gold at 35 dollars per troy ounce. The International Monetary Fund and World Bank were created at the same conference to oversee the system. Bretton Woods delivered exchange rate stability during the postwar growth era but came under strain as US deficits and European dollar accumulation outpaced American gold reserves. On August 15, 1971, President Nixon announced the suspension of dollar-gold convertibility — the so-called Nixon Shock — effectively ending the Bretton Woods system. By 1973, major currencies had transitioned to floating exchange rates determined by market supply and demand, a regime that has persisted. On September 16, 1992, hedge fund manager George Soros shorted the British pound against the European Exchange Rate Mechanism constraints, forcing the UK's withdrawal in what became known as Black Wednesday. Electronic trading platforms emerged in the 1990s and 2000s, replacing voice-brokered interbank markets and dramatically reducing transaction costs for institutional and retail participants alike.
Frequently Asked Questions
Sources & References
Formula
Swap = Lots × Contract Size × Swap Rate × Point Value × Days
The daily swap charge or credit equals the lot size times the contract size times the swap rate in points times the point value. This is multiplied by the number of days held, with an extra 2 days added for each Wednesday rollover (triple swap) to account for the weekend.
Worked Examples
Example 1: EUR/USD Long Position — 7 Days
Problem: You hold 2 standard lots of EUR/USD long for 7 days. Swap long = -3.5 points, swap short = +1.2 points. Account in USD (exchange rate = 1).
Solution: Daily swap (long): 2 × 100,000 × (-3.5) × 0.0001 = -$70.00/day\nTotal for 7 days: -$70 × 7 = -$490.00\nWith Wednesday triple: 1 Wednesday = 2 extra days\nAdjusted total: -$70 × 9 = -$630.00\nAnnual cost if held: -$70 × 365 = -$25,550
Result: Daily: -$70.00 | 7-day total: -$490.00 | With Wed triple: -$630.00
Example 2: AUD/JPY Carry Trade — 30 Days
Problem: You hold 1 standard lot of AUD/JPY long for 30 days. Swap long = +6.8 points. Account in USD, AUD/USD = 0.65.
Solution: Daily swap: 1 × 100,000 × 6.8 × 0.0001 = ¥68/day\nIn USD (÷ exchange rate): assume swap already in quote ccy\n30-day total: ¥68 × 30 = ¥2,040\nWith 4 Wednesdays (8 extra days): ¥68 × 38 = ¥2,584\nAnnual income: ¥68 × 365 = ¥24,820
Result: Daily: +¥68 | 30-day: +¥2,040 | Annual: +¥24,820
Frequently Asked Questions
What is a swap (rollover) in forex trading?
A swap, also called a rollover or overnight interest, is the interest rate differential between the two currencies in a forex pair that is charged or credited to your account when you hold a position overnight. Every currency has an associated interest rate set by its central bank. When you buy a currency with a higher interest rate and sell one with a lower rate, you earn a positive swap (credit). When you sell the higher-yielding currency and buy the lower-yielding one, you pay a negative swap (debit). Swaps are applied at the end of each trading day, typically at 5:00 PM Eastern Time (New York close). The exact swap rates are set by individual brokers and may differ from the theoretical interest rate differential due to broker markups, liquidity conditions, and administrative costs.
Why is there a triple swap on Wednesday?
The triple swap on Wednesday exists because of the settlement convention in the forex market. Forex trades settle on a T+2 basis, meaning a trade executed on Monday settles on Wednesday. When a position is held overnight from Wednesday to Thursday, the settlement moves from Friday to Monday, spanning the weekend (Saturday and Sunday). Since no swaps are charged on Saturday and Sunday even though interest accrues over those days, the Wednesday rollover accounts for all three days: Wednesday night itself plus Saturday and Sunday. Therefore, if you hold a position through Wednesday at 5 PM ET, you are charged or credited three times the daily swap rate. Some brokers apply the triple swap on Friday instead, so it is important to check your specific broker's policy. This mechanism ensures total annual interest charges correctly reflect 365 days regardless of weekends.
How do brokers determine swap rates?
Brokers determine swap rates based on the interest rate differential between the two currencies in a pair, but they also apply their own markup. The base calculation uses the overnight interbank lending rates (such as SOFR for USD, EONIA/ESTR for EUR, SONIA for GBP) for each currency. The theoretical swap equals the difference between these rates, adjusted for the position direction. However, brokers typically charge a spread on both long and short swaps, meaning the positive swap you receive is lower than the theoretical value, and the negative swap you pay is higher. Some brokers offer swap-free (Islamic) accounts that comply with Sharia law by eliminating interest charges, though they may apply alternative fees. Swap rates change frequently as central banks adjust interest rates and interbank lending conditions evolve.
How do swap rates affect trading strategies?
Swap rates significantly impact several trading strategies. Carry trade strategies specifically seek to profit from positive swap rates by buying high-yielding currencies against low-yielding ones and holding positions for extended periods. For example, buying AUD/JPY when Australian rates are high and Japanese rates near zero. Swing traders who hold positions for days or weeks must factor swap costs into their profit calculations, as negative swaps can erode gains over time. Day traders who close all positions before the daily rollover time are generally unaffected by swaps. Position traders and long-term investors face the largest swap impact and should calculate the annual swap cost as a percentage of their position size. In periods of significant interest rate differentials between major economies, swap income or costs can materially affect overall trading performance.
Can you earn money from swap rates?
Yes, it is possible to earn money from positive swap rates, a strategy known as the carry trade. When you hold a long position in a currency pair where the base currency has a significantly higher interest rate than the quote currency, your broker credits your account with a positive swap each night. For example, if the swap long rate for a pair is +5 points per lot per night, holding one standard lot earns approximately $5 per day or $1,825 per year (including triple Wednesdays). However, several risks exist: currency exchange rate movements can easily wipe out swap income, central banks may change interest rates unexpectedly, and broker swap rates may be adjusted without notice. Additionally, brokers take a markup that reduces your actual earnings below the theoretical interest differential. Successful carry traders typically combine swap income with technical or fundamental analysis to also profit from favorable price movements.
How do swap rates and rollover fees work in forex?
Swap rates are interest charges or credits applied when you hold a position overnight. They reflect the interest rate differential between the two currencies in the pair. Positions earn or pay swap depending on the direction and rate differential. Wednesday swaps are tripled to account for the weekend.
References
Reviewed by Daniel Agrici, Founder & Lead Developer · Editorial policy