How is a swap applied in forex trading?

<p id="isPasted">In forex trading, a swap (also known as a rollover) is an interest adjustment (either a credit or a debit) applied to your trading account for any position held open beyond the daily rollover time. This is essentially the cost or income derived from the interest rate differential between the two currencies in a given pair.&nbsp;</p><p><strong>How Swaps are Applied</strong></p><p>Trigger Time Swaps are typically applied at the end of each trading day, which is usually at 5:00 PM New York Eastern Time (EST). If a position is closed before this time, no swap is charged or credited.</p><ul><li>Credit or Debit Whether you pay or receive a swap depends on the interest rates of the currencies you are trading and the direction of your position (long or short).</li><li>Positive Swap (Credit): Occurs when you buy a currency with a higher interest rate and sell a currency with a lower interest rate. Your account is credited with the interest differential.</li><li>Negative Swap (Debit): Occurs when you buy a currency with a lower interest rate and sell a currency with a higher interest rate. Your account is charged the interest differential.</li></ul><p>Triple Swap Wednesday To account for weekends when the forex market is closed but interest is still calculated by the underlying banks, a triple swap is typically applied on Wednesday at the rollover time. This covers the interest for Saturday and Sunday.&nbsp;</p><p><strong>Broker Role</strong></p><ul><li>Your broker automatically handles the calculation and application of swaps. The exact swap values (often labeled "swap long" and "swap short" for each currency pair) are displayed within your trading platform's specifications for each instrument. Brokers may also add a small administrative fee to the interbank swap rate.&nbsp;</li><li>Understanding swaps is crucial for swing and long-term traders, as these fees can significantly impact overall profitability over time. </li></ul>