Key takeaway: Swap fees (overnight financing charges) are an important cost to consider when holding forex and CFD positions overnight. This guide explains how Eightcap calculates swap fees, provides real-world examples, and outlines effective risk controls to manage these costs.
What Are Swap Fees?
Swap fees — also known as overnight financing fees, rollover fees, or interest rate differentials — are charges or credits applied to positions held past 5:00 PM Eastern Time (ET) each trading day. They represent the cost of holding a leveraged position overnight and are calculated based on the interest rate differential between the two currencies in a forex pair, or the underlying financing cost for CFDs on commodities, indices, and other instruments.
Eightcap, a globally recognised forex and CFD broker regulated by the UK Financial Conduct Authority (FCA) under FRN 920058, the Australian Securities and Investments Commission (ASIC) under AFSL 391441, and the Cyprus Securities and Exchange Commission (CySEC) under Licence 424/22, applies swap fees consistently across its account types. The swap fee can be positive (you receive a credit) or negative (you pay a charge), depending on the direction of your trade and the interest rate differentials of the instruments you are trading.
📊 Market context: According to the Bank for International Settlements (BIS), the forex market's daily turnover exceeds $7.5 trillion, with a significant portion of trades held overnight. Swap fees are a standard practice in the industry, reflecting the cost of borrowing one currency to buy another. Understanding swap fees is essential for any trader who holds positions for more than one day.
Important: Swap fees are not optional — they are automatically applied to any position held past the daily cutoff time (5:00 PM ET). For positions held over the weekend, swap fees are typically applied for three days (Wednesday to Friday) to account for the weekend closure. Always factor swap fees into your trading plan, especially if you are a swing or position trader.
Eightcap provides transparent swap rate information directly in its trading platforms (MT4, MT5, and TradingView) under the "Specifications" or "Symbols" section. Traders can view the current long swap (charge for buying) and short swap (charge for selling) rates before opening a position.
How Eightcap Calculates Swap Fees
Eightcap calculates swap fees using a standard formula that takes into account the interest rate differential, the broker's administrative markup, and the size of your position. The formula is as follows:
Swap Fee = (Position Size × Swap Rate × Number of Days) / 10
Where:
Position Size — the size of your trade in lots (e.g., 1.0 standard lot = 100,000 units).
Swap Rate — the current long or short swap rate for the instrument, expressed in points or percentage points.
Number of Days — the number of days the position is held overnight (weekend days may be charged as triple).
Swap Rates in Points vs. Percentage
Eightcap displays swap rates in two formats:
In Points: The swap amount is shown in pips or points per lot. For example, a swap rate of -2.0 points means you pay 2.0 points per lot per night.
In Percentage (Annualised): The swap rate is expressed as an annualised percentage, which can be converted to a daily charge based on your position size.
💡 Example: If you buy 1.0 standard lot of EUR/USD and the long swap rate is -3.0 points, you would pay approximately $3.00 per night (since 1 point = $1.00 on a standard lot for USD-denominated pairs). For a micro lot (0.01), the cost would be $0.03 per night.
According to Eightcap's official pricing, swap rates are updated daily and reflect the current interbank interest rates, plus a small administrative markup. The rates are dynamic and can change based on central bank decisions, market conditions, and the broker's funding costs.
Always verify current swap rates: Swap rates are subject to change daily. Always check the current swap rates in your MT4/MT5 platform or TradingView before opening a position, especially if you plan to hold it for multiple days.
Swap Rates Comparison by Account Type
Eightcap offers consistent swap rates across its Standard and Raw accounts. However, the Islamic (swap-free) account is available for traders who wish to avoid swap charges due to religious reasons. Below is a comparison of swap-related features across account types.
Feature
Standard Account
Raw Account
Islamic (Swap-Free) Account
Swap Charges
Apply (long and short)
Apply (long and short)
No swap charges
Administrative Fee
Included in swap rate
Included in swap rate
Applies (flat fee per instrument)
Triple Swap
Applied on Wednesday
Applied on Wednesday
Not applicable
Swap Display
MT4/MT5 specifications
MT4/MT5 specifications
Not applicable
Best For
All traders
All traders
Sharia-compliant traders
📋 Islamic account note: The Islamic (swap-free) account is available to clients who follow Sharia law. Instead of swap charges, Eightcap applies a flat administrative fee on positions held overnight. The fee varies by instrument and is disclosed in the account terms. This structure ensures the account remains compliant while covering the broker's funding costs.
For traders using Standard or Raw accounts, swap fees are applied consistently regardless of account type. The choice between Standard and Raw affects spreads and commissions, not swap rates.
Real-World Examples of Swap Costs
The following scenarios illustrate how swap fees can impact your trading results over time.
Scenario 1 – Positive Swap (Carry Trade): Emma buys 1.0 standard lot of AUD/JPY, a pair with a positive interest rate differential. The long swap rate is +2.5 points per night. She holds the position for 30 days.
Swap earnings: 2.5 points × $1.00 (pip value for 1.0 lot on JPY pairs) × 30 nights = $75.00 in positive swap.
Emma earns $75.00 in swap credits while holding her position. This is a classic carry trade strategy, where traders profit from interest rate differentials.
Scenario 2 – Negative Swap: James buys 0.5 lots of EUR/USD. The long swap rate is -3.0 points per night. He holds the position for 10 days.
Swap cost: 3.0 points × $1.00 (pip value for 1.0 lot) × 0.5 lots × 10 nights = $15.00 in negative swap.
James pays $15.00 in swap fees over the 10-day period. This cost reduces his net profit. If his trade only generated a $50 profit, the swap fee would reduce it to $35.00.
Scenario 3 – Triple Swap on Wednesday: Maria sells 0.2 lots of GBP/USD on Monday and holds the position through Wednesday night. The short swap rate is +1.5 points.
Swap calculation: On Wednesday, the swap is tripled (3 × 1.5 points = 4.5 points). Over the 3 nights (Monday, Tuesday, Wednesday), her total swap is: (1.5 + 1.5 + 4.5) × $1.00 × 0.2 = $1.50.
Maria receives a small positive swap of $1.50 for holding the position over the week. This demonstrates how Wednesday's triple swap can significantly impact cumulative swap earnings or costs.
Practical tip: If you are a swing trader holding positions for weeks or months, swap fees can become a significant factor in your overall profitability. Always consider the swap rate direction and magnitude when planning long-term trades. For positive swap strategies, holding longer can enhance returns; for negative swap, you may want to close positions before the daily cutoff or consider the Islamic account option.
Factors Affecting Swap Rates
Swap rates are not fixed — they fluctuate based on a variety of market and macroeconomic factors. Understanding these factors can help you anticipate changes in swap costs.
Central Bank Interest Rates: The primary driver of swap rates is the difference between the central bank interest rates of the two currencies in a forex pair. For example, if the Federal Reserve (US) raises rates while the European Central Bank (ECB) holds steady, the USD/XXX swap rates will adjust accordingly.
Market Liquidity: During periods of low liquidity, swap rates may widen as banks and liquidity providers adjust their funding costs.
Broker Administrative Markup: Eightcap adds a small markup to the interbank swap rate to cover its own costs. This markup is typically minimal but can vary between brokers.
Economic Data Releases: Inflation reports, GDP data, and other economic indicators can influence market expectations of future interest rates, causing swap rates to shift.
Geopolitical Events: Political instability, trade tensions, and other geopolitical events can cause sudden changes in interest rate expectations and swap rates.
Instrument Type: Swap rates for commodities (like gold or oil) and indices are based on the underlying financing costs of those assets, which may differ from forex swap calculations.
📊 Expert insight: According to the Bank for International Settlements (BIS), the interest rate differential between major currencies is the most significant driver of swap rates. Traders should monitor central bank communications and economic data releases to anticipate changes in swap rates. Eightcap updates its swap rates daily, so checking them regularly is essential.
📈 Impact on Carry Trades
Carry trades profit from positive interest rate differentials. When central banks diverge — one raising rates while another cuts — swap rates can become highly favourable for carry traders.
📉 Impact on Swing Traders
Swing traders who hold positions for days or weeks must consider swap costs as part of their overall trading costs. Negative swaps can erode profits, while positive swaps can enhance them.
Managing Swap Costs
Swap fees can significantly impact profitability, especially for traders who hold positions for extended periods. Follow this practical checklist to manage and minimise swap costs effectively.
Checklist: Managing Swap Costs
Check swap rates before opening a position — view the long and short swap rates in your MT4/MT5 platform under the "Specifications" section for each instrument.
Calculate the total swap cost for your expected holding period. Multiply the daily swap rate by the number of days (and account for triple swap on Wednesday).
Consider opening positions on Thursday to avoid the Wednesday triple swap if you are holding over the weekend.
Close positions before 5:00 PM ET if you want to avoid swap fees for that day.
Use the Islamic (swap-free) account if you are a Sharia-compliant trader or if you want to avoid swap charges entirely (administrative fees may still apply).
Factor swap costs into your risk-reward calculation — ensure the potential profit exceeds your total costs, including swap fees, spreads, and commissions.
Monitor central bank announcements as they can cause sudden changes in swap rates.
Use a demo account to test the impact of swap fees on your trading strategy before committing real capital.
Tip: In your MT4/MT5 platform, you can view the "Swap" column in the "Trade" tab to see the current swap for each open position. This helps you track accumulated swap costs in real time.
Swap Cost Estimation
To estimate your total swap cost, use the following calculation:
Total Swap Cost = (Daily Swap Rate × Position Size × Number of Days) + (Wednesday Triple Swap Adjustment)
For positions held over multiple weeks, swap costs can accumulate and significantly impact your P&L.
Common Mistakes with Swap Fees
Ignoring swap fees entirely: Many traders focus only on spreads and commissions, overlooking swap fees. For swing and position traders, swap fees can be larger than spread costs.
Not checking swap direction: Long and short swap rates differ. Opening a position in the wrong direction can result in unexpectedly high swap charges.
Holding through Wednesday without realising the triple swap: The triple swap on Wednesday can triple your swap cost or earnings. For negative swap positions, this can be a costly surprise.
Assuming swap rates are fixed: Swap rates are dynamic and change daily. Relying on outdated swap rates can lead to inaccurate cost estimates.
Not considering swap in the risk-reward ratio: Failing to include swap fees in your risk-reward calculation can lead to trades that appear profitable on paper but are not after accounting for overnight costs.
Using the Islamic account for non-religious reasons: While the Islamic account avoids swap charges, it incurs administrative fees that may sometimes be higher than standard swap costs. Compare both options.
Overlooking swap for non-forex instruments: Swap fees apply to commodities, indices, and cryptocurrencies as well. The rates for these instruments can be significantly different from forex swap rates.
Risk Warning and Trading Considerations
Important Risk Disclosure
Forex and CFD trading carry a high level of risk and may not be suitable for all investors. According to ESMA and ASIC data, a significant proportion of retail investor accounts lose money when trading CFDs. Eightcap reports that approximately 70–75% of retail investor accounts lose money trading CFDs with the firm.
Key risks associated with swap fees and overnight positions:
Swap cost accumulation: Over time, negative swap fees can significantly reduce your account equity, especially if you hold large positions for extended periods.
Market volatility: While holding positions overnight, unexpected news or economic data can cause significant price movements, leading to losses that may outweigh any positive swap earnings.
Liquidity risk: Swap rates can widen during periods of low liquidity, increasing the cost of holding positions.
Margin risk: Swap fees are deducted from your account balance. If your account equity falls below margin requirements due to swap deductions, you may face a margin call.
Leverage risk: Leverage amplifies both gains and losses. Even with positive swap, the leveraged nature of CFD trading can lead to rapid account depletion if the market moves against you.
This guide is for educational and informational purposes only. It does not constitute financial, legal, or trading advice. Always verify current swap rates, leverage limits, margin requirements, and regulatory status directly with the official Eightcap website or the relevant regulator before making any trading or investment decision. Consider seeking independent financial advice before trading forex or CFDs.
References: FCA Financial Services Register, ASIC Professional Register, CySEC Public Register, and Eightcap's official risk disclosure documents.
Best Practices for Swap Management
Always check swap rates before opening a position — they are displayed in the platform's instrument specifications.
Consider the total cost of holding a position, including spreads, commissions, and swap fees, in your profit calculation.
Use the Islamic account if you are a Sharia-compliant trader or if swap fees are consistently high for your preferred instruments.
Monitor your open positions regularly and close them before the daily cutoff if you wish to avoid swap charges for that day.
Keep a trading journal that tracks swap costs alongside trading P&L to understand the true cost of your strategies.
FAQs About Eightcap Swap Fees
What are swap fees on Eightcap?
Swap fees are overnight financing charges or credits applied to positions held past 5:00 PM ET. They reflect the interest rate differential between currencies or the underlying financing cost for other instruments.
How does Eightcap calculate swap fees?
Eightcap calculates swap fees using the formula: Swap Fee = (Position Size × Swap Rate × Number of Days) / 10. Swap rates are displayed in points or percentage terms in the MT4/MT5 platform.
What is the triple swap on Wednesday?
On Wednesday, positions held overnight are charged triple the standard swap rate to account for the weekend closure (Friday, Saturday, Sunday). This applies to forex and some CFD instruments.
Does Eightcap offer a swap-free account?
Yes. Eightcap offers an Islamic (swap-free) account for clients who follow Sharia law. Instead of swap charges, a flat administrative fee applies to overnight positions.
Where can I find swap rates on Eightcap?
Swap rates are available in the MT4/MT5 platform under the "Symbols" or "Specifications" section. You can also view them in TradingView or by contacting Eightcap support.
Can swap fees be positive?
Yes. If you are trading in the direction of a positive interest rate differential, you may receive a swap credit instead of paying a fee. This is known as a carry trade strategy.
How can I avoid swap fees on Eightcap?
You can avoid swap fees by closing all positions before 5:00 PM ET, using the Islamic (swap-free) account, or trading instruments that do not incur swap charges (e.g., certain CFDs may be swap-free).
Is Eightcap a regulated broker?
Yes. Eightcap is regulated by the FCA (UK) under FRN 920058, ASIC (Australia) under AFSL 391441, CySEC under Licence 424/22, and the SCB (Bahamas) under SIA-F217. Always verify the regulatory status of the entity that holds your account.