📖 Financial Lexicon Term
What is Swap Rate?
The interest rate differential between the two currencies of a pair, credited or debited to your account during rollover.
Detailed Explanation
If you buy a currency with a higher interest rate than the one you are selling, you receive positive swap (the broker pays you). If you buy the lower-yielding currency, you pay negative swap (the broker charges you). Wednesday night incurs 'Triple Swap' to account for the weekend.
💡 Practical Trading Example
Holding a long position on USD/JPY (high US rates, negative Japan rates) pays you a positive swap credit every night.