Swap definition

A swap is a contract in which two parties exchange cash flows or financial obligations on agreed terms. In retail forex and CFD trading, swap most often means the overnight financing amount you pay or receive for holding a position past the broker's daily cut-off.

Most swaps trade over the counter, negotiated directly between parties rather than on an exchange, and include interest rate swaps, currency swaps, and credit default swaps. In a retail account, the broker applies the swap after its daily rollover time, and you may pay or receive it depending on the instrument, your trade direction, the interest rate difference between the two currencies, and the broker's pricing.

Swap is tied to rollover, the point each day when open positions roll to the next value date. The swap is the financing adjustment booked at that moment. It is separate from the spread and any commission, and it accrues only while the position stays open overnight.