Why Holding Overnight Costs (or Pays) Something
A forex trade is really a loan of one currency to buy another. Every currency has its own interest rate set by its central bank, and when you hold a position overnight, your broker charges or credits you the difference between the interest rate of the currency you're long and the one you're short. This adjustment is the swap, also called rollover.
It's applied once for every full trading day a position stays open, at a fixed daily rollover time (typically around 5pm New York time, when the forex trading day officially rolls to the next).
Positive Swap vs Negative Swap
If you're long the higher-interest-rate currency and short the lower one, you generally earn swap. Get it backwards — long the lower rate, short the higher one — and you generally pay swap. The exact amount depends on the specific pair, your broker's rates, and your position size, and it can change over time as central banks move rates.
The Triple Swap Day
Since currency settlement is actually two business days ahead, brokers charge three days' worth of swap on one specific weekday to account for the weekend, when no rollover would otherwise apply. This is most commonly Wednesday, though it varies by broker — check your specific broker's rollover schedule rather than assuming.
Why This Matters More Than It Seems
For a trade that's in and out same-day, swap is irrelevant — it only applies to positions still open at rollover. But it becomes a real factor the moment you start holding trades for days or weeks, since a small daily cost compounds the longer a position stays open. A trade that's barely profitable on price movement alone can turn unprofitable once swap is factored in over enough days.