Swaps, also called rollover or the cost of carry, are fees or credits applied when you hold a Forex trade overnight. Explaining this clearly helps beginners feel more confident about what happens when they keep trades open overnight. Even though the market runs 24/5, brokers reset positions daily around 5 p.m. New York time.

When that reset hits, you either pay or earn money, depending on the interest-rate difference between the two currencies in your pair. Trading involves borrowing one currency and lending another, so higher interest rates can result in positive swaps, while higher borrowing costs lead to negative swaps. Brokers also add their own adjustment to the rate. Swaps accumulate daily, and to account for the weekend, brokers apply a triple swap on the last trading day of the week, usually Friday.