What is a swap rate?
Swap rates, also known as overnight or rollover rates, are debits or credits, either earned or paid for holding a position overnight. Swissquote settles overnight positions at 23:00 CET using market accepted, interbank swap rates.
Where do these rates come from?
Institutions that deal in FX put out daily swap rates - prices they are willing to exchange currencies at on a given day. Institutions publish swap rates based on their own risk-management analysis and on market activity. Swissquote's swap rates are essentially the interbank fee for positions held overnight, with a separate rate for each instrument, expressed in absolute values.
- Currency pairs: 100’000 units
- Gold, Palladium, Platinum: 100 ounces
- Silver: 5’000 ounces
- OIL, LCO: 1’000 barrels
- SMI, ESX: 10 units
- DAX: 25 units
- Nil: 6 units
- ALL, CUL, PBL, ZNL: 25 units
- NGC: 10’000 units
- CUC: 25’000 units
For instance, let suppose that overnight swap rates are the following for short/long on AUDJPY currency pair: -0.0078498305/0.0045559725
That means that you are paying 784.98 JPY for holding a 100’000 AUDJPY short position and receiving 455.59 JPY for holding a 100’000 Long position.
For Metatrader, under swap profile “Money” the amount is converted back to base currency. That means , paying 8.13 AUD for holding a 100’000 AUDJPY short position and receiving 4.95 AUD for holding a 100’000 Long position.
Why interbank rates rather than benchmark rates?
Other brokers may continue to offer their overnight rates using an old method that applies benchmark rates based on interest-rate differentials between central banks. Swissquote believes in maximum transparency and our method, more so than the benchmark method - aligns itself with the market daily. The interbank swap rate further takes into account recent liquidity, market dynamics and volatility on a given currency pair.
Synthetic rollovers for easy account statements
Swissquote settles its rollovers synthetically - meaning positions are not closed and reopened overnight. Instead, a debit/credit is applied to a trader's statement as a separate line item, making for clear and easy evaluation. Swissquote applies a triple swap on Wednesday 23:00 CET to account for weekend rollovers. There are some exceptions to this rule:
- Triple swap rollovers will be applied Thursday 23:00 CET for USDCAD, USDTRY and USDRUB.
- Triple swap rollovers will be applied Friday 23:00 CET for ALLUSD, CUCUSD, CULUSD, NILUSD, PBLUSD, ZNLUSD, LCOUSD, NGCUSD, OILUSD, DAXEUR, ESXEUR and SMICHF