Rollover

Rollover only touches trades that are still open at the daily cutoff. The cutoff is commonly 5 p.m. New York time, which many brokers show as midnight on their server clock. Check your broker's server time: compare your platform's server clock with New York time to see what hour the cutoff falls on for you.

If you close before the cutoff, you pay nothing and earn nothing. If you hold for days or weeks, these small nightly amounts can turn a small win into a loss.

Only a trade still open at the 5 p.m. New York cutoff is charged or paid rollover

What happens to your position at the daily cutoff

A spot forex trade technically settles two business days after you open it. Retail traders almost never want the actual currency delivered. So at each daily cutoff, the broker closes your position and reopens it at almost the same price, with a settlement date one day later. That shift is the rollover.

Each currency in a pair has its own interest rate. When you hold a pair, you are borrowing one currency and holding the other. If the currency you bought pays more interest than the one you sold, the rollover can be a small credit. If it pays less, you pay a charge. Brokers add their own markup, so on some pairs both a buy and a sell are charged.

The rollover period is the short window around the cutoff, when liquidity is thin and spreads often widen sharply.

Counting the swap cost on a multi-day trade

The numbers below are an illustrative example. You buy 1 standard lot (100,000 units) of EUR/USD on Monday. Your broker lists the long swap as -8 points per lot. A point is one pipette (0.00001), and on 1 standard lot it is worth $1. You hold the trade for five nights.

One of those five nights is the triple rollover night. It is charged three times to cover the weekend, when no rollover is booked. Because spot settles two business days later, Wednesday's rollover moves the settlement date from Friday to Monday, so Wednesday is usually the triple night. The diagram below shows where each night's rollover moves the settlement date.

How each night's rollover moves the settlement date, with Wednesday jumping over the weekend

Now convert the total into pips, so you can compare it with your profit target:

Turning a swap rate into a cost in pips

Charge per night8 points × $1= $8

Charged nights4 + 3= 7

Total swap$8 × 7= $56

Cost in pips$56 ÷ $10 per pip= 5.6 pips

Five nights held-$56, about 5.6 pips

If your target was 20 pips, rollover alone took over a quarter of it. Turn that into a rule: if the swap over your planned hold is more than a quarter of your target, widen the target, shorten the hold or skip the trade.

A common mistake is reading "-8" as 8 pips. Many swap tables are quoted in points, so -8 points is only 0.8 pips per night. Check the unit before you panic, and before you relax.

Finding the swap rates for your symbol

Most trading platforms show rollover rates in the symbol's contract specifications. Look for three fields:

• Swap long: the rate for a buy.
• Swap short: the rate for a sell.
• Swap type: the unit, such as points, account currency or an annual percentage.

The same window usually names the triple-rollover day. Once a trade is open, a swap column in your positions list or trade history shows what has been booked so far.

Checks before you hold a trade overnight

• Check net profit, not price profit. Floating profit on some screens leaves out swap. Add the swap column before judging the trade.
• Avoid the cutoff window. Don't open trades, place tight stops or rely on market orders in the minutes around rollover. A buy's stop is triggered by the bid, so when the bid drops as the spread widens, your stop can fill even though the mid price barely moved, and the spike shows on the chart as a one-candle wick.
• Recheck long holds. Swap rates follow interest rates and broker pricing, so a credit can turn into a charge.
• Hedging still costs. A buy and a sell on the same pair are each charged their own swap, so a "locked" position can keep losing money.
• On a swap-free account, check the holding fee. Some brokers replace swap with a fixed fee, and on short holds it can cost more than the swap would have.

How a widened spread at rollover can hit a buy trade's stop while the mid price barely movesIllustration

Rollover on futures and CFDs: a contract switch, not interest

The word means something slightly different outside spot forex:

• Futures: each contract has an expiry date. Rolling over means closing the expiring contract and opening the next one. Rollover week is the period before expiry when most volume moves to the next contract.
• CFDs on futures (oil or index CFDs, for example): the broker rolls the underlying contract for you. You'll see a rollover adjustment line in your history. It cancels out the jump between the old and new contract price, so your profit doesn't change because of the roll itself (fees aside).

How a CFD rollover adjustment cancels the price jump between the old and new futures contract

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