Swap

Swap rates are determined by the interest rate differential between the base and quote currency of the pair you're trading. If you buy a currency with a higher interest rate than the one you sell, you receive a positive swap. If the opposite, you pay a negative swap. Swaps are typically applied at 5 PM EST (the forex rollover time).

For most prop traders, swap costs are a minor concern because day traders close positions before rollover. However, swing traders who hold positions for days or weeks need to factor swap costs into their trade planning. A negative swap of $15 per day on a standard lot adds up to $105 per week — a meaningful drag on profitability.

Some prop firms offer swap-free accounts for religious reasons (Islamic accounts). These may have different fee structures to compensate. PropJournal tracks swap costs per trade and shows the total impact on your P&L, so swing traders can make informed decisions about hold times.