Rollover
Trading MechanicsThe process of extending the settlement date of an open forex position to the next trading day. Rollover results in a swap charge or credit based on interest rate differentials.
What Is Rollover?
Rollover is the process of extending an open forex position from one trading day to the next. The forex market technically settles trades two business days after execution (T+2). When you hold a position past the Daily Cut-Off time (typically 5 PM New York / 10 PM GMT), the settlement date is rolled forward and a Swap charge or credit is applied.
How Rollover Works
At rollover time, your broker automatically closes and reopens your position at the current market rate while applying the swap rate. In practice, you do not see any closed trades on your platform. You simply see the swap amount added to or deducted from your Floating P/L or account balance.
Triple Rollover Wednesday
On Wednesdays, you are charged or credited three days of swap instead of one. This accounts for the weekend (Saturday and Sunday) when the market is closed but interest still accrues. So a position held from Wednesday to Thursday incurs three times the normal swap. Some brokers apply triple swap on Fridays instead of Wednesdays, so check your broker's specific rollover schedule.
Related Terms
Swap
The overnight interest charge or credit applied when holding a forex position past the daily cut-off time. Swap rates reflect the interest rate difference between the two currencies.
Daily Cut-Off
The time each day when one trading day officially ends and the next begins. Typically 5:00 PM New York time (10:00 PM GMT). Swap charges are applied at this time.
Cost of Carry
The total cost of holding a forex position over time, including swap charges, financing fees, and the opportunity cost of margin used.