What is the concept of swap fees?

<p id="isPasted">Swap fees, also known as "rollover" or "overnight" fees, are charges that occur in the forex and trading markets when a position is held open overnight. In essence, these fees represent the cost or benefit of holding a trading position beyond the end of the trading day, when the market is closed.</p><p>The concept of swap fees revolves around the difference in interest rates between the two currencies being traded in a forex pair. Each currency has an associated interest rate set by its respective central bank. When you trade a forex pair, you're essentially borrowing one currency to buy another. If the currency you're buying has a higher interest rate than the one you're selling, you might earn a positive swap fee. Conversely, if the currency you're buying has a lower interest rate, you could incur a negative swap fee.</p><p>The swap fee is calculated based on the interest rate differential between the two currencies, and it can be either credited to or debited from your trading account. It's important to note that swap fees are typically applied at the end of each trading day and can vary depending on the broker you're using, the currency pair being traded, and the direction of your trade (buy or sell).</p>

<p id="isPasted">A Forex swap is a fee credited or debited to your open trades for having a position open in the market overnight. When you roll a position over to the next trading day, you will either earn or pay a swap. These swaps will continue to accrue on your open positions until the trade is closed.</p><p>The close of the trading day is considered to be at the close of business New York time, or 22:00 GMT (London time). Any trades carried over during this time to the next trading day may incur a swap fee.</p>