SWAP term in forex

I prefer the account with the type of free swap, because I am used to trading more than one day. Even though there are positive and negative swaps, I often get negative swaps.

I prefer the account with the type of free swap, because I am used to trading more than one day. Even though there are positive and negative swaps, I often get negative swaps.

if you get a negative swap, then your trading conditions are positive, why don't you close if your trading position is positive.

Currency swap

In general, swaps are defined as a contract of purchase or sale of foreign exchange transactions with a spot rate combined with the purchase or sale of foreign currency that is the same as the forward rate.

SWAP means a contract of buying and selling foreign exchange at a spot price combined with a purchase between foreign exchange sales equal to the forward price.


In buying and selling conducted using the Spot rate agreement combined with the purchase or sale of foreign exchange with a Forward Rate agreement, where many currencies or both parties agree on the type of currency to be used in the agreement. In a forex sale or purchase agreement sometimes the currency used is a hard currency and a weak currency.


Hard Currency or better known as hard currency. This means that a currency is most often used as a reference in the conversion of a country's domestic currency (Domestic Currency). As for those included in hard currency, namely US Dollar, Pound sterling, Australian Dollar, Japanese Yen, and Euro.


Conversely for weak currencies (Soft Currency) is a currency that is rarely used as a measure in exchange of foreign currency with domestic currency. The advantage of using a strong currency in currency conversion is the ease of exchanging with other currencies, which is then known as convertible foreign exchange. The position of the foreign currency is an asset, which is currently not inferior to gold.


This swap contract is a combination of contracts or spot and forward transactions. In applications in the field of international finance, this swap contract has its own advantages for contract executors. The swap contract will provide benefits to the seller as well as the buyer later.


Forward means giving approval to make a purchase and sale of a certain amount of foreign exchange on a certain date in the future and at a fixed exchange rate called the forward rate. A spot means that transactions are carried out in cash and for transaction settlement such as payment and delivery of goods can be done the next day, 2x24 hours.


Example of a simple currency swap

For example, an Indonesian entrepreneur gets a loan of USD 100,000 for a period of 180 days. Then the loan is converted into rupiah with a spot rate of Rp. 8000 / USD, so he gets as many rupiahs:

USD 100,000 X Rp.8000 / USD = Rp.800,000,000.00

Swap is the difference in the benchmark interest rate that applies in each country whose currency is traded on the forex market. Swap is only accepted by traders from overnight positions past midnight (broker server time) and will be determined based on whether the position opened by the trader includes long positions (buy a pair) or short positions (sell a pair). In any pair, the trader must pay interest on the currency sold, and at the same time will receive interest from the currency purchased.

ok bro ... thank you very much for giving good information.

i better choose a broker who offer free swap thab using with swap, some broker even have crazy swap, my experienced, i got 1$ for only hold 1 night, thats crazy, i open lot with 0.05

Swaps are now being abandoned by many brokers who provide swap-free facilities.
with so many new members.