what is swap in forex trading 2025

Today we are going to talk about one of the most important Forex concepts called Swap. Trades in Forex are CFDs and regulated brokers connected to the global market must cover a large volume of trades daily. When we trade on the Forex market, that is, when we buy or sell currency pairs, we do so with a broker. This means that the broker is connected to us as a buyer or seller.

In order for our transactions and trades to be valid, the broker must have as much money in his account as he sells to us, If we consider this figure for all traders and users of a broker, given the high volume of transactions and daily trades in the Forex market, where about 8 trillion dollars are traded in the Forex market every day, no broker can have this amount of money in its account.

In order to provide this amount of money and capital, regular brokers sign contracts with banks and receive loans from banks and settle this amount at the end of each day. So it is natural that you pay interest and swap for leaving your trade open for a few days. Therefore, in order for brokers to cover our trades and settle loans, we pay interest or swaps to brokers so that brokers can cover the volume of our trades.

The amount of swap we pay depends on 3 factors

1_How long our trading is open
2_The size of our trading volume
3_The interest rate of the currencies in the currency pairs we trade

For example, if your trade is open for 3 days, you will have to pay more swap than for a trade that is open for 1 day . The longer your trade is open, the more swap you will pay. of course, the amount of swap also depends on the volume of your trade.

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