Have you ever opened a trade, held onto it overnight, and noticed a small charge or even a credit in your account the next morning?

That’s not a mistake. It’s called overnight interest, also known as swap or rollover fee—a common (and often overlooked) part of leveraged trading.

Understanding overnight interest is key to managing your trading costs, especially if you’re a swing trader or someone who holds positions for more than a day.

Let’s break it down in simple, human terms.

What Is Overnight Interest?

Overnight interest is a small fee or payment you receive or pay when you hold a trading position past market close, usually at 5pm New York time (which marks the end of the trading day in most forex markets).

It’s essentially the cost of “borrowing money” to keep a leveraged position open overnight.

Think of it like this:
If you were trading with £1,000 of your own money, you wouldn’t owe anything.
But if you use leverage and control £50,000 worth of a currency pair, you’re technically borrowing the rest.
That borrowed portion accrues interest—just like a loan.

Why Do Brokers Charge Overnight Interest?

Every currency pair consists of two currencies, each with its own interest rate. When you trade forex, you’re buying one currency and selling another—so you’re earning interest on one and paying interest on the other.

If the currency you buy has a higher interest rate than the one you sell, you might get paid overnight interest.
If the opposite is true, you’ll be charged a fee instead.

💡 This is called the “carry trade” strategy—profiting from interest rate differences.

A Quick Example

Let’s say you go long (buy) on AUD/JPY:

• The Australian dollar (AUD) has a higher interest rate than the Japanese yen (JPY).
• You’re borrowing JPY and buying AUD.

If you hold this trade overnight, you could earn interest, because you’re “carrying” a higher-yielding currency.

But if you sell AUD/JPY, the opposite happens—you pay interest.

✅ With VT Markets, the swap rate is calculated daily and clearly visible on MT4/MT5 before you place your trade.

How Overnight Interest Affects Your Trading

Here’s where it gets real.

🔹 1. It Adds Up Over Time

If you hold positions for several days or weeks, swap fees can eat into your profits—or boost your gains if you’re on the right side.

Let’s say your trade earns £50 in profit—but you held it for 10 days and paid £3 in overnight interest each day.
That’s £30 gone—your net profit is now just £20.

🔹 2. It Impacts Strategy Choice

Day traders rarely worry about swaps—they close all trades by day’s end.

But if you’re a:

• Swing trader
• Trend follower
• Position trader

…then swaps should absolutely factor into your strategy. You need to know when they’re worth it—and when they’re not.

🔹 3. Wednesday Is Triple Swap Day

Yes, you read that right.

Because forex settlements take two business days, holding trades on a Wednesday means triple swap is applied to account for the weekend.

📅 This can be painful—or profitable—depending on your position.

How to Manage Overnight Interest Like a Pro

You don’t have to fear overnight interest—you just need to understand it. Here are a few ways to manage it smartly:

✅ Check Swap Rates Before You Trade

Always check the swap fee in your trading platform. VT Markets lists this transparently on MT4/MT5 under “specifications” for each instrument.

✅ Avoid Holding Trades Too Long (Unless It Makes Sense)

If you’re paying swap and your trade is going nowhere, cut your losses early. Holding out of hope rarely ends well.

✅ Use Positive Swaps to Your Advantage

Some pairs pay positive overnight interest. For example, buying a high-interest currency against a low-interest one might actually earn you interest—especially in a trending market.

✅ Factor It Into Your Risk-Reward Ratio

Just like spreads and commissions, swap should be considered when setting your target profit and stop-loss levels.

Do All Instruments Have Overnight Interest?

Most do—especially in forex, commodities, indices, and shares CFDs.

However, swap-free (Islamic) accounts are available for traders who need them for religious reasons. VT Markets supports this option for eligible clients upon request.

💡 If you’re unsure whether your account type includes overnight interest, check your account settings or speak to our support team.

Final Thought: Little Charges, Big Impact

It’s easy to ignore the small print when trading. But those little overnight charges? They add up—especially if you’re trading frequently or holding large positions.

Understanding overnight interest is like knowing the hidden costs of owning a car—it won’t stop you from driving, but it helps you drive smarter.

So, before you hold that position overnight, ask yourself:
Is the swap working for me—or against me?

At VT Markets, we empower you with the transparency and tools to make smart trading decisions—day or night.

📲 Ready to take control of your trading costs?

Log in to VT Markets and check your instrument’s swap rate today. It might just change how you trade tomorrow.