Triple swap
Family IV · Costs
Not to be confused with swap fee, swap, forex swap.
Triple swap is the triple-sized financing adjustment applied to a leveraged position when it is rolled over a settlement date that covers a weekend or public holiday. Because spot foreign exchange settles on a two-day cycle, a position carried through Wednesday's rollover normally accounts for the weekend's value dates, and brokers pass that accumulated cost or credit on as a single triple charge. The rate is set by the broker and varies by instrument, account type and jurisdiction.[1]
Why three days are charged at once
Spot currency trades settle two business days after the trade date. A position rolled over on a Wednesday is therefore valued on Friday, and if it is held past that rollover the next value date falls on the following Monday, skipping Saturday and Sunday. Rather than apply three separate daily adjustments, the broker applies one adjustment equal to three days' worth of the overnight financing rate.
The same logic applies before public holidays: a rollover that spans a one-day market closure is charged at double the daily rate, and a rollover spanning a two-day closure is charged at triple. The exact day on which triple swap is applied depends on the instrument and the broker's value-date convention, so it is not the same for every market.
Worked example
The position is debited 24.00 instead of 8.00 on the triple-swap rollover. A short position with a positive daily rate would instead be credited three times the daily amount.
What determines the amount
- Instrument: major currency pairs, metals, indices and crypto CFDs each carry their own financing basis.
- Position direction: long and short sides can have different rates, and one side may be positive while the other is negative.
- Broker policy: the multiplier, the day it is applied and whether it is charged on notional or on leveraged value all vary by firm and by regulator.
- Account type: swap-free or Islamic accounts replace the overnight charge with a separate administration fee, which may also be tripled.
Often confused with
- swap fee
- A swap fee is the general label for any overnight financing charge, while triple swap is specifically the three-day version applied before a market closure; the visible sign is the multiplier stated in the broker's rollover schedule.
- swap
- A swap is the daily rollover adjustment itself, whereas triple swap is that same adjustment multiplied by three on one particular rollover; the visible sign is whether the charge equals one day's rate or three.
- forex swap
- A forex swap is the financing adjustment on a currency pair, and triple swap can apply to any instrument including metals and indices; the visible sign is the instrument listed alongside the triple rate.
See also
References
- ↑ Policy rate publications of the relevant central banks. Overnight financing follows the interest-rate differential between the two currencies, plus the broker's own markup, so the figure is not fixed.