A swap in forex is the amount debited or credited when a position is held past the broker's daily rollover time. It reflects the interest rate differential between the two currencies of the pair, adjusted by the broker's markup, and is quoted separately for long and short positions in the instrument specification.
How the swap is calculated and where the figure appears
Holding a pair means being long one currency and short the other, so the position accrues one interest rate and pays the other. The broker converts that differential into a figure per lot per night and applies its own markup, which is why the long and the short value are not mirror images of each other.
In MetaTrader both values sit in the contract specification of the instrument (right-click the symbol, then Specification), shown as Swap long and Swap short together with the unit they are expressed in — points, percentage or account currency. The amount already accrued appears in the Swap column of the open position and is added to the floating result.
The arithmetic on one lot, when the values are quoted in points:
swap amount = swap rate in points × value of one point per lot × lots × nights held
With a long swap quoted at −0.85 points, a point value of $1 per lot — one point is the fifth decimal on EUR/USD — and one lot held for three nights: −0.85 × 1 × 1 × 3 = −$2.55 deducted from the account. The weekend is settled in one charge on the day named in the specification — for most FX pairs Wednesday, when a single night is billed at triple the rate, so the same position is debited −$2.55 on that date alone. Swap is a cost of carry, not a result: it is applied whether the position is showing a gain or a loss, and it keeps accruing for as long as the position stays open.
Check the figures for your own instrument. Contract sizes, point values and the swap fields used above are set out in Trade calculations in MT4.
Why a swap can be positive or negative
If the currency you are long carries the higher interest rate, the differential works in your favour and the position may be credited; if it carries the lower rate, the differential is charged. The markup is applied in both directions, so a differential that is positive in the interbank market can still show a negative number on a retail account. Central bank decisions move the differential and brokers republish the values accordingly, so a pair that was credited last month can be charged this month without anything changing in the position itself.
Swap, spread and commission are three different costs
The spread is the distance between the bid and the ask. It is paid once, at the moment the position is opened, and it does not depend on how long the position lives. Commission, on account types that charge it, is a fee per lot traded and is likewise tied to opening and closing. Swap is the only one of the three that is a function of time: it is applied at every rollover the position survives. On a position held for weeks it can become the largest of the three costs, which is why it belongs in the calculation before the trade is opened rather than after.
