Simply put, a swap is an interest paid or credited in order to keep a position open overnight.
Swaps are expressed in points per lot and vary depending on the financial instrument and the broker.
Swaps are applied every day of the week; however, from Wednesday to Thursday, there may be a triple swap charge, depending on the instrument.
The purpose of a swap is to act as an interest rate for leveraged funds. When trading with leverage, you essentially borrow money to open bigger positions. A swap is a sort of interest rate for that loan.
Depending on the asset, there are different swaps for buying and selling.
To view the buy or sell swap for any asset from your MT5 platform, you can follow these steps:
Click on View from the top toolbar.
Click on Symbols (you can also click Ctrl + U for instant access)
In the pop-up window, from the left side, select the category you wish to check (for example, Forex)
From the right side of the pop-up menu, choose the asset you want to check (for example, EURGBP)
In the window below, scroll down until you see Swap long (buy) and Swap short (sell)
If you wish to avoid swaps, you can close your positions before the end of the trading day.
For our Muslim Clients, we offer Islamic accounts which are swap-free.