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 USD per lot of:
- 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: -8.28/5.
That means that you are paying 8.28 USD for holding a 100’000 AUDJPY position and receiving 5USD 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 Wednesday evenings to account for weekend rollovers, with the exception of USDCAD, USDTRY, USDRUB where triple swap will be applied Thursday evenings
Please note: Rates applied will be visible on the Swissquote website after 23:00 CET and updated after every end of day process.