Glossary
Swap (overnight financing)
The financing charge or credit for holding a leveraged position past the broker's daily rollover. It differs by broker, symbol and direction.
A swap (overnight financing, rollover) is the amount a broker charges or pays when a CFD or currency position stays open past the daily rollover. It reflects interest rates on the full value of the position plus the broker's markup, so long and short swaps usually differ and both can be negative. Many brokers book three days at once on one weekday to cover the weekend.
Example
You hold 10 ounces of gold at 4,000.0, a position worth 40,000 USD. Suppose the broker charges the equivalent of 6% a year on long gold. One night costs 40,000 × 0.06 ÷ 365 ≈ 6.58 USD, about 1.6 bp of the position. Over 10 nights that is about 66 USD, or 16 bp.
Why it matters
Swap is small for one night and large for a strategy that holds positions for weeks. A backtest that ignores it overstates multi-day results. Check the broker's current swap table for the exact symbol you trade.