Explaining Swap Fees

What Are Swap Fees and How Are They Calculated?

Swap fees, also referred to as overnight fees, are interest charges that you either pay or receive for holding a position overnight. These fees vary based on the type of trade: Swap Long (for long positions) and Swap Short (for short positions). The fee amount depends on the instrument you are trading, the direction of your trade, and the number of nights the position remains open.

Key Points About Swap Fees:

• Positive Swap: Earn interest from the contract.
• Negative Swap: Pay interest for the contract.
• Triple Charge on Wednesdays: To account for the weekend, swap fees on Wednesday are three times the regular amount.

How to View Swap Fees on MT5

1. Go to the Market Watch section.
2. Right-click on a chosen symbol (e.g., EURUSD) and select Specification.
   
   
3. Scroll down to see the Long Swap and Short Swap values.
   
   

Example Swap Calculation on MT5:

Formula:
Point Size x Lot Size x Contract Size x Swap Rate

• Point Size: The smallest price movement (e.g., 0.00001 for EURUSD).
• Lot Size: Trade size in lots (e.g., 1 lot = 100,000 units).
• Contract Size: Typically 100,000 for forex pairs.
• Swap Rate: The value of the swap rate for the position.

Example 1: Swap Short for 1 Lot on EURUSD (Rate = 6.8255)
0.00001 x 1 x 100,000 x 6.8255 = $6.8255
You would receive $6.8255 in swaps.

Example 2: Swap Long for 1 Lot on EURUSD (Rate = -10.23506)
0.00001 x 1 x 100,000 x -10.23506 = -$10.23506
You would pay $10.23506 in swaps.

How to View Swap Fees on Liquid Charts

1. Open the Watchlist section.
2. Right-click on the chosen symbol and select Instrument Info.
   
   
3. The Overnight Rate values for long and short swaps are displayed in pips on the right-hand side.
   

Example Swap Calculation on Liquid Charts:

Formula:
Pip Value x Swap Rate x Number of Nights

• Pip Value: Calculated as Contract Size x Lot Size x Pip Size.
• Swap Rate: The overnight rate for the chosen instrument.
• Number of Nights: Duration the position remains open.

Example: Swap Long for 1 Lot on EURUSD (Rate = -0.68600)

• Pip Value: $10
• Swap Rate: -0.68600
• Nights: 1

10 x -0.68600 x 1 = -$6.86
You would pay $6.86 in swaps.