How do swaps relate to forex?

Could anyone here explain Swaps and how they relate to forex, Earlier today I heard a passing comment that got me interested.

Also, If there is anyone here going in the direction of 'why did the price just move' rather than, 'quick its moving jump in'.... Id like someone to bounce ideas around with.

Good trading,

Leon.

as swaps is like you have mortage with broker.

and remember most borker give you 1:100 leverage. so you brollow the money form borker, so they charge swaps for their income.

most of the swaps that give you intrest will be none favoritable side like buy or sale.

for jumpping price most of time happend after major news. however, at other time. it will depends on big player, how they think the price would be.

Hi guys,

Hope you are all trading well.

I have an interview at a Bank in its FX dept, he asked me about Swaps & I quoted some stuff I had read on Investopedia that I had researched & he totally shot me down.

He said that a swap is like a forward that could be rolled forward past it's maturity date. I appreciate you guys are traders & deal with speculation whereas he was referring to a swap as a hedging product against ERR.

Can anybody possibly explain what he meant?

Would be great if anyone had any advice.

Cheers

As I understand, a swop - is a commission, which broker takes on your open order. For example, if you have an opened position, and you won't close it till 21.00 GMT, the swap will automatically taken from your deposit.

.
"Currency Swaps" as Investors/Entities transactions and the "swaps" between us traders and our Brokers have same principle but
are 2 different things. A Banker may have very sophisticated answers and know a lot of theory about Currency swaps
but the one in out trading platform is quite a simple concept.

They gives a credit to buy currencies. They charge Interest for our loans. We can choose the currency we want to buy and the currency
of our loan. Every transaction we open is a Purchase (buy). If we open buy aud/usd we are buying AUD and our loan is in USD.
If we sell aud/usd we are buying USD and our loan is in AUD.

So, let say we buy 100 000 AUD with loan in USD (buy 1 lot of aud/usd) at 1.0425.
Now we own 100 000 aud and have a debt of 104 250 USD.

As the 100 000 we purchased is in their accounts they give us interest for it. Say to a rate of 3% per year or whatever
is the rate for the currency. But we also we have a debt in USD and they charge us interest for it, say 0.50% per year
or whatever the rate of the currency.

The swap we see in our platform then is a rate derived of differences between the interest we get for what we own and the interest they charge
for our debt in a daily base at rollover time. Each Broker calculate them as they please.
The will never give us the full % of the currency we own (they give us less) , nor charge exactly the % in our debt (they charge us more).
Making also a spread on the rates. That is why most of them are negative to us traders.

J.