What's this rollover / swap all about? | Forex Beginning - Forex for beginners

What's this rollover/swap all about?

If you have an open position and do not close it by 09:00 PM GMT (or 05:00 PM New York time), you will either make or lose a certain (small) amount based on the interest rate differential.

Since every currency trade constitutes lending one currency to buy another currency, interest rates come into play in forex trading. You will have to pay interest on the currency you borrowed and receive interest for the currency you've bought.

If you are buying a currency with an interest rate higher than the interest rate of the currency you are selling, the difference between the two interest rates will be a positive number and will be credited to your account on the following business day. Please ask your brokerage for details regarding 'interest swap', which is also called 'rollover' or 'overnight rate'.