Overnight financing — the swap

When you keep a trade open past a set time of day (usually server midnight), a charge called the swap, or overnight financing, is applied to your account.

Where it comes from

You are — in theory — borrowing one currency and depositing another. The difference between the two currencies’ interest rates is what is credited or debited. So if the currency you are buying has the higher rate, the swap may be in your favour; if the reverse, it is against you.