Overnight fee

Overnight fees, also known as swap or rollover, are interest adjustments applied to positions held open beyond the daily market rollover time, typically 5 PM Eastern Standard Time. This fee reflects the interest rate differential between the two currencies in a pair, plus or minus a broker's commission. Traders pay if they are borrowing a higher-interest currency and lending a lower-interest one, and may receive a credit in the opposite scenario.

For retail traders, overnight fees represent a recurring cost or potential income for positions held longer than one day. These fees can accumulate significantly on large positions or over extended periods, potentially eroding profits or deepening losses. Understanding these costs is crucial for swing and position traders, as they directly impact trade profitability, especially when considering the often small daily pip movements.