Swap (rollover interest)

Swap is the interest-rate differential between the two currencies in a pair, applied daily to positions held through rollover. Holding the higher-yielding currency generally earns a credit; holding the lower-yielding one incurs a debit.

For short-term traders swap is negligible, but on multi-week positions it can materially change the arithmetic — and a persistent negative swap can quietly consume the profit of an otherwise correct trade.