CFDs are leveraged instruments. And so, when you hold them overnight, a financing adjustment applies. These small daily debits or credits are known as swap rates or overnight financing charges. Understanding how they work helps you manage long-term positions and protect your returns.
This guide explains what swap rates are, when they apply, how they’re calculated, and where to check them on ActivTrades, with practical examples for forex, indices, shares, and commodities.
What Are Swap Rates? The Basics
A swap rate (also called a swap fee) is the overnight financing charge or credit applied when a CFD trade stays open past the daily cut-off time.
CFDs are leveraged products, in that you only put down a fraction of the trade’s value as margin, and your broker effectively finances the rest. The swap reflects that financing cost (or credit).
If you’re long, you may pay interest for borrowing the underlying exposure. If you’re short, you may receive a credit, though the reverse can sometimes happen, depending on market conditions.
In short, swap rates adjust your position for the time value of money and the interest rate differentials behind it.
When Are Swap Fees Applied?
Swap fees apply when you hold a CFD position past the platform’s daily rollover time, usually around 10pm UK time (depending on the asset).
If your trade is closed before the rollover, no swap is charged or credited. If you keep it open, one day’s swap applies automatically.
Some days, typically Wednesdays for forex pairs, carry a triple charge or credit to account for the weekend when markets are closed but financing still accrues. Public holidays can also affect swap timing.
Swaps therefore vary by product, market, and day of the week, so always check the live data before holding overnight.
CFD Swap Calculation – How Are Swap Fees Calculated?
The CFD swap calculation depends on a few key inputs:
- The underlying reference rate (e.g., central bank or interbank rate)
- The type of asset (forex, index, share, or commodity)
- Whether the position is long or short
- The instrument’s specific swap rate, as published by ActivTrades
While the maths involves annualised interest rates and pip values, traders rarely need to calculate swaps manually. Instead, you can use ActivTrades’ Spreads & Swaps page or your trading platform’s built-in calculator to view daily rates.
These rates can change with interest rate moves, liquidity, and market volatility, so it’s worth checking them regularly, especially if you hold trades for multiple days.
CFD Swap By Asset Class: FX, Indices, Shares, Commodities
Swap logic varies slightly depending on what you trade:
- Forex (FX): Swaps reflect the interest rate difference between the two currencies. Long a higher-yielding currency? You may receive a credit. Long a lower-yielding one? You’ll likely pay. See ActivTrades Forex for details.
- Indices: Index CFDs mirror index futures pricing, so their swaps reflect equity market funding costs and dividend adjustments. See ActivTrades Indices.
- Shares: Swap rates often include corporate actions like dividends. Long positions may be charged when dividends are paid; shorts may receive an adjustment. See ActivTrades Shares.
- Commodities: Swaps depend on underlying futures curves (contango/backwardation) and the cost of carry, which varies by product. See ActivTrades Commodities.
Each market has its own structure, but the key point remains: swaps represent the daily financing cost of your exposure.
Where To Find Swap Rates Today On ActivTrades
You can check live swap rates in two places:
- The Spreads & Swaps page, which lists indicative daily rates for each instrument.
- The instrument’s info panel in your ActivTrades trading platform (MetaTrader or ActivTrader).
These values are updated regularly. Because swaps are dynamic, driven by interest rate changes and liquidity, it’s good practice to confirm them before holding positions overnight.
Swap Fee Or Credit? Long vs Short
Depending on your position direction, you may pay or receive swap:
- Long positions (buying): You typically pay the swap fee.
- Short positions (selling): You may receive a small credit though not always.
Which side applies depends on interest rate differentials and the underlying market’s structure. In low or inverted rate environments, both sides can result in a charge.
This is why checking the current swap rate before holding overnight is essential. It can make a real difference to your net profit or loss over time.
Worked Examples: Reading, Estimating & Verifying Swap Rates
Let’s look at two simple scenarios:
Example 1: FX Position
You’re long EUR/USD overnight. If euro rates are lower than US rates, your position incurs a negative swap (charge). If reversed, you might earn a small credit.
Example 2: Share CFD
You hold a long position in a dividend-paying share overnight. When a dividend is paid, your CFD may be adjusted downward to reflect the payout (since the CFD mirrors the share’s ex-dividend price).
In both cases, the swap or adjustment is visible in your trade ticket or daily statement. Always verify the live rate on the instrument’s page before deciding whether to hold a trade open.
FAQs – CFD Fees and Charges
What Are Swap Rates in Trading?
They’re the daily financing costs or credits applied to CFD positions held overnight.
Why Do I Pay a Swap Fee?
Because CFDs are leveraged products, part of the position’s value is financed by the broker.
Do Short Positions Always Earn Swaps?
Not necessarily. It depends on market rates and liquidity. Sometimes both sides are charged.
Can Swap Fees Change Daily?
Yes. They move with interest rate shifts, liquidity conditions, and volatility.
How Can I Reduce Swap Costs?
Avoid holding leveraged trades overnight unnecessarily, or consider shorter timeframes for active trading.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
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