Rollover & Swap

That weird thing that happens to your trades every night. It's just bookkeeping.

What it is

Forex trades in a 24/5 market with no central exchange. At some point every day, the books need to close and reopen. That process is called rollover. It typically happens between the US and Asia sessions, though the exact time varies by broker. Most allocate 30 to 90 minutes for it.

During rollover, three things happen that confuse or scare new traders. None of them are a problem if you know what's going on.

1. Swap charges

If you hold a position past rollover, you get charged (or credited) swap. This is the interest you pay for the funds the broker lends you to maintain the leveraged position overnight. Think of it as a daily financing fee for using borrowed capital.

Swap can be positive or negative depending on the interest rate differential between the two currencies in the pair. Most of the time it's a small cost. On Wednesdays it's tripled (covers the weekend). It's not a penalty, it's not a scam, it's just the cost of holding leveraged positions overnight. And sometimes it's not a cost at all. Swaps are not always an expense, they can work in your favour and even become the basis of an entire strategy.

2. Spread widening

During rollover, spreads widen significantly. Liquidity drops because the major sessions have closed and the next one hasn't fully opened. On top of that, brokers pause parts of their infrastructure to sync with accounting, and while those services are down they can't accurately track price movements, so they widen spreads as a safety buffer. Some pairs get back to normal quickly, others stay wide until their underlying market reopens.

This looks alarming on the chart, and yes, if you're holding a large position your P&L will swing visibly when a 1-pip spread suddenly jumps to 50 pips. But this is temporary. Once the spread returns to normal, so does your P&L. No money was lost, no money was gained, the numbers just looked ugly for a few minutes. The real danger is if you have stop losses or take profits sitting inside that spread window, because those will get triggered by the widened spread. Make sure your supporting orders are placed outside the potential rollover spread range.

3. Price gaps

Some instruments may have no price data at all during rollover, creating gaps in both time and price. Bonds and futures may stop trading entirely. If you're holding a position and suddenly see a gap on the chart, this is likely why.