When someone asks “What is Swapin forex?” they may mean one of two things: a company called Swapin that works with crypto payments, or the much more common market term “swap” in foreign exchange trading. I’ll explain both briefly and then focus on the forex concept most traders encounter every day: the overnight swap (also called rollover).
Quick clarification: two different topics
If you meant the company Swapin, that is a fintech/crypto payments provider — a service that helps businesses accept or convert cryptocurrency and settle in fiat. That is not part of the foreign exchange market mechanics covered below.
If you meant “swap” in forex trading, the term refers to the interest adjustment applied when you hold a currency position past the daily rollover time. This is the concept most retail traders need to understand, because it affects account balances, carry trades and the cost or income of holding positions overnight.
What a forex swap (overnight rollover) actually is
Every forex trade involves two currencies. When you buy a currency pair you are long the base currency and short the quote currency; when you sell, the positions are reversed. Because each currency is backed by a central bank and has its own benchmark interest rate, holding one currency while shorting another is effectively like borrowing in one currency and lending in the other. The swap is the interest adjustment that reflects that overnight borrowing/lending.
Brokers calculate and apply swaps at the daily rollover time (commonly around 5:00 PM New York time, though the exact moment can vary). If the interest rate of the currency you are long is higher than the one you are short, you may receive a small credit each night. If it is lower, you usually pay a charge. For most short-term intraday traders the amounts are small, but for swing or position traders holding lots of volume for days or weeks, swaps accumulate and matter.
How swaps are calculated — the idea step by step
The detailed math differs between brokers, but the practical elements are the same: the swap depends on the interest-rate differential between the two currencies, the size of your position, the current market price, and the number of nights you hold the trade. Brokers typically publish two swap rates for every symbol: one for long positions and one for short positions.
Think of a simple example to see the logic. Suppose you trade EUR/USD and hold one standard lot (100,000 euros):
- You are long EUR/USD if you buy the pair: you own euros and are short US dollars.
- If the euro’s interest rate is lower than the dollar’s, borrowing dollars costs more than lending euros earns, so you pay a negative swap each night.
- If the euro’s rate is higher than the dollar’s, you earn swap instead.
Brokers convert the rate differential into a nightly fee (or credit) often shown as a dollar amount per standard lot or as points/pips. They may use a formula that annualises the differential and then prorates it per day. Importantly, one day each week (commonly Wednesday) includes a triple swap to account for the weekend settlement, so the swap for that day reflects three nights’ interest.
Practical uses and strategies involving swaps
Swaps are not simply a nuisance; they’re a building block of several legitimate strategies and commercial uses. Corporates and institutional traders use swaps and FX swap contracts to fund operations in another currency or hedge exposures. For retail traders, the most visible strategies are carry trades and earnings from positive swap differentials. A carry trade is straightforward: buy a currency with a higher interest rate and sell one with a lower rate, collecting the positive overnight interest while hoping the exchange rate doesn’t move against you.
However, the potential income from swaps should never be the main reason to hold a position. Exchange-rate moves, funding risk, and leverage can quickly turn a seemingly safe carry into a loss.
How brokers treat swaps and what to watch for
Brokers display swaps differently: some post swap rates on their platforms or in symbol specifications, others show the expected nightly debit/credit in your open position window. Swap policies can vary: the size, the currency used for the swap calculation, and the triple-swap day can all differ by broker. Some brokers offer “swap‑free” accounts (sometimes called Islamic accounts) that avoid traditional interest charges; these accounts usually replace swaps with alternative fees or slightly wider spreads.
Because brokers set their swap rates and update them when market conditions change, always check the published rates and how they are applied. When testing an idea on a demo account, watch how swaps accumulate over several days so you understand their real impact.
Example: a simple walk-through
Imagine you buy 1 standard lot of AUD/JPY at 90.00. Australia’s policy rate is 4.00% and Japan’s is 0.10%. You are long AUD (the higher-rate currency) and short JPY (the very low-rate currency). If the broker’s published long-swap for AUD/JPY is +0.20 (in the broker’s quoted units), that represents a small nightly credit for holding the position. Over 30 nights that credit adds up and can partially offset trading losses or add to profits — provided the exchange rate itself doesn’t move unfavourably.
Flip the trade and sell AUD/JPY: now you are short the higher-rate AUD and long the low-rate JPY, so you’ll likely pay the swap each night. That cost can erode profits on longer-term short positions.
Risks and caveats
Swaps are tied to interest rates and broker policies, so they are not fixed income. Central bank decisions, economic news and short-term market stress can change rates rapidly, and brokers can (and do) update swap values. Relying on positive swaps without managing market risk is dangerous: a favourable overnight credit does not protect you from price movements that can produce much larger losses. Triple-swap days mean you pay or receive three days’ worth of swap on the designated weekday; if you hold many positions through that day the impact can be significant.
There is also counterparty and operational risk. Swap credits depend on your broker’s calculations and willingness to honour published rates; using an unregulated or poorly capitalised broker raises the chance that operational errors or abrupt policy changes affect your account. Finally, leveraging positions to chase swap income amplifies losses if the market moves against you.
Trading carries risk. This article is educational and not personalised trading advice. Always test strategies on a demo account, read your broker’s swap policy, and include swap costs or income in your risk and money management.
If you meant the company “Swapin”
If your search was for “Swapin” (one word) rather than “swap in forex,” that is a separate subject. Swapin is a fintech/crypto payment provider that offers services for converting or accepting cryptocurrency payments and settling in fiat currencies for businesses and individuals. That business is not the same as the overnight swap mechanism used in FX trading — one is a payments product in the crypto space, the other is a market interest adjustment embedded in currency trading.
Key Takeaways
- A forex “swap” (rollover) is the overnight interest adjustment reflecting the interest-rate difference between the two currencies in a position; it can be a cost or a credit.
- Swap amounts depend on the interest-rate differential, position size, broker policy, and the number of nights held; brokers usually publish swap long/short values.
- Traders use swaps in carry trades and hedging, but swaps are a secondary factor — exchange-rate movement and leverage carry larger risks.
- Always check your broker’s swap rules, watch the triple-swap day, test on a demo account, and remember that trading carries risk; this is educational information, not personalised advice.
References
- https://en.wikipedia.org/wiki/Foreign_exchange_swap
- https://www.swapin.com/
- https://fenefx.com/en/blog/swap/
- https://www.dukascopy.com/swiss/english/marketwatch/articles/what-is-swap-in-forex-trading/
- https://fenefx.com/en/blog/difference-between-commission-and-swap/
- https://www.investopedia.com/terms/f/foreign-currency-swaps.asp
- https://www.bis.org/publ/qtrpdf/r_qt0803z.htm