What is an overnight swap rate?
When you hold a CFD position past the broker's daily cut-off—typically 22:00 or 23:00 GMT—the broker either charges or credits an overnight financing fee. This fee is based on the underlying interbank rate (SOFR for USD instruments, €STR for EUR) adjusted by the broker's markup, then converted to a daily basis. On long positions you almost always pay; on short positions you may receive a credit if the rate differential is in your favour.
The Wednesday triple swap
The three-day settlement convention in spot forex means that Wednesday's rollover covers the upcoming weekend. If you hold a forex CFD position through Wednesday's cut-off, you are charged—or credited—three days of swap in a single debit. Many retail traders holding positions over long weekends are caught out by this: what looks like a one-night fee becomes three nights' financing in one transaction.
How brokers calculate the daily rate
Most brokers use this formula: (Position size × Mid price × Swap rate in points) ÷ 10. The swap rate is derived from the interest rate differential between the two currencies, adjusted by a broker markup of typically 0.5–2% annualised. On a 100,000-unit long EUR/USD position with a swap of −0.60 points per day, the nightly cost is approximately USD 6—or USD 1,080 annualised on a single standard lot.
Crypto swaps: structurally different
Crypto CFDs do not follow interbank rate conventions. Instead, brokers apply a flat overnight fee—typically 0.04–0.08% of position value per day. On a £10,000 Bitcoin CFD position, that is £4–£8 per night, or £1,460–£2,920 annualised. For traders holding crypto positions longer than a few days, this cost materially erodes carry. Always model the financing cost before entering a swing trade on crypto CFDs.
Weekend gaps and swap compounding
Crypto markets trade 24/7, but many CFD brokers only process rollovers during weekday sessions. This creates a Friday-evening triple swap scenario for crypto—identical to the forex Wednesday effect. On top of that, crypto price gaps over weekends can push Monday's open past any pending stop, meaning you face both swap charges and slippage simultaneously on a single weekend hold.
How to minimise swap costs
The simplest tactic is closing positions before the daily cut-off and reopening after—though the spread cost usually outweighs the swap saving on major forex pairs. For commodity and crypto positions where swap rates are higher, closing before weekends is generally worthwhile. Some brokers offer swap-free accounts for Islamic finance compliance; these substitute administration fees that may be higher than standard swap on multi-week holds.