Swap-free account

A swap-free account, also known as an Islamic account, is a trading account type that does not charge or credit overnight interest (swap) on positions held open past the daily rollover time. This mechanism bypasses the interest rate differential between the two currencies in a pair, which typically results in either a payment or receipt by the trader.

For retail traders, these accounts eliminate the cost or income associated with holding trades overnight, simplifying trade management. Brokers often compensate for the lack of swap by charging a wider spread or an administrative fee after a certain number of days a position is held. This can affect profitability, especially for long-term strategies.