Swap

Hello All,

I am new to trading forex and have been doing some demo work on MetaTrader4. I notice that after some time I got charged a Swap Amount. Can someone explain to me what this means and is this done with every broker? The help is highly appreciated.

Thanks.

I have noticed that also and have been wondering the same thing.

that is called interest, or rollover. if you are long the currency with a higher interest rate (higher of the two involved in the pair), you are paid interest. if you are long the currency with the lower interest rate, you are charged interest.

so, for instance, if you are long the EUR/USD, you are being charged interest, because the EUR rates are at 2.25% and the US rates are at 4.25%. rollover happens once a day, usually around 5PM EST, and wednesday is triple rollover day. it can get pretty complicated, and there are ways to make money strictly from the rollover (see Cash & Carry threads).

Interesting, I had no idea about this concept. Thank you Merlin.

Now is this something all brokers do?

it is interesting to answer something that maybe unecesarrily answered.

not all broker do that,, some replace it with commision, some just widen the spread.
and there is allways a search button , on the up-right of this page.