Anna held a micro lot on USD/TRY for three weeks, betting on the lira falling. The rate did fall, and yet her account was barely in the green. The swap had eaten the difference — barely a dollar charged every night on that micro lot, a cost she had not even thought about when she opened the position. The interesting part came later: a friend trading the same pair at a different broker had paid a noticeably gentler swap. Where does that gap come from, if there is only one market? In this article I explain who really sets swap rates and why the same pair can carry a different swap at every broker.

Where does a swap rate come from in the first place?

A swap point is not a fee a broker invents for its own sake. Its base is the interest rate gap between the two currencies that make up the pair. When you hold a position overnight, in economic terms you are borrowing one currency to hold the other — and each of those currencies has its own rate. If you buy the higher-rate currency against the lower-rate one, that gap works in your favour. In the opposite direction you pay. The same force that drives the carry trade on USD/JPY sits behind every single swap point on your account.

The interbank market prices that rate gap as so-called forward points — how far the forward rate sits from the spot rate. Put plainly: the rate for delivery in two months differs from today's rate precisely because, over those two months, one currency earns more interest than the other. The relationship even has a name — covered interest rate parity — and it is one of the firmest equations in international finance. The forward, and therefore the swap, is not a whim. It is the arithmetic of interest rates.

How does the market turn a rate gap into a daily point?

Institutional tom-next rolls settlement between consecutive value dates. Many spot pairs use T+2 settlement, while exceptions and currency holidays affect dates. A retail rolling CFD's financing follows the provider's contract; it is not a physically deliverable spot position that must automatically be closed and reopened in the client's account every night.

The official MetaTrader 5 documentation describes it directly: on over-the-counter markets, moving a position to the next trading day happens as a swap, which is precisely this overnight roll. The market where those points are set is enormous — according to the BIS survey from April 2022, FX swaps are the largest segment of the currency market, with turnover of 3.8 trillion dollars a day. I break down the two legs of such a transaction in a separate piece on the institutional FX swap.

Paraphrasing the standard retail reference on the subject: holding a position overnight means you either earn or pay interest, depending on the interest rate differential between the two currencies you trade. — Kathy Lien, *Day Trading and Swing Trading the Currency Market*, Wiley, 2015.

The final amount does not reveal provider markup

If the method separates a market component and a fee, assessing the fee requires both. Fictional A has a −5 USD market component and −1 USD fee; B has −4 and −2 USD. All values already use one common unit: one lot and one day.

Scroll sideways to see the full diagram

The final amount does not reveal provider markupA: market −5 plus fee −1 totals −6 USD per lot per day. B: −4 plus −2 also totals −6. At 0.50 lot over two days, both charge 6 USD, but the fee component is 1 USD in A and 2 USD in B.Same total, different fee shareA: market −5 + fee −1 = −6Fee: 1 of 6 USD per lot per dayB: market −4 + fee −2 = −6Fee: 2 of 6 USD per lot per day0.50 lot × 2 days: both total −6 USDThe final amount alone hides the fee.
Different component combinations can produce the same client charge.

Both total charges are −6 × 0.50 × 2 = −6 USD. The fee component over that period is −1 USD in A and −2 USD in B. Knowing only the final −6 USD does not uniquely reconstruct these components. IG's document describes the relationship tom-next + administration fee; this diagram uses different, invented monetary values. A difference between final swap rates alone does not prove a markup difference. Check the disclosed components and their units.

Model assumptions: Same product, direction, date, lot and USD currency; final component values in an additive model, before applying the multiplier. A/B do not describe real providers. Mechanism source: IG Australia — How is funding on forex positions calculated?. This is an illustrative educational example, not current market data.

Where does the broker step in, and why do rates differ?

And here is the catch. The market base is the same for everyone — the gap between euro and dollar rates does not depend on where you hold your account. But the broker takes that base and converts it into its own swap table, adding a margin. Exactly as it adds a markup to the spread between the bid and the ask. There is no official fixing of swap rates anywhere in this process — no institution publishes one binding table for the whole market. The result? A point that is slightly positive on the market stays slightly positive at one broker, while at another it lands at zero or below — because its markup is larger.

The second reason for the differences is more technical: brokers fund positions with different liquidity providers and reference different benchmark rates. The starting point can therefore vary a little before anyone even adds a margin. The reality is that this layer is rarely transparent — at most brokers the swap table is a finished long and short number, with no breakdown into "this much from the market, this much ours". What you see is the market base run through one broker's price list. Why the market rate itself is not "clean" is explained well by the BIS analysis of interest parity and the cross-currency basis — since the 2008 crisis, funding through an FX swap regularly departs from textbook theory.

What does the difference look like in numbers?

Take an illustrative example to see what is at stake. Assume a pair where the base currency carries a rate roughly four percentage points higher than the quote currency. On the market that produces a clearly positive carry for a long position. You open one micro lot and hold it for 30 nights.

Broker A — smaller markupLong swap of about +0.55 USD per night; over 30 nights that is roughly +16.50 USD of positive accrual.
Broker B — larger markupThe same market carry, but the long swap is close to zero (+0.05 USD per night); over 30 nights only about +1.50 USD.
What it meansAn identical position, an identical market, yet the accrual differs by more than tenfold — purely because of the broker margin.

These figures are invented and rounded; their elevenfold ratio belongs only to this hypothetical tariff comparison. Actual long and short financing rates can both be negative. Check the instrument's current contract and table rather than assuming that the policy-rate difference ensures a credit.

What does this teach an individual investor?

The most important lesson is this: you do not pay the "market" swap rate, you pay your broker's rate. That distinction changes how you should plan any position held longer than a single day. For a scalper or a day trader the swap is irrelevant — the position closes before the roll anyway. But for anyone holding a currency for weeks, the swap point becomes a real line in the cost ledger, sometimes larger than the spread and commission combined. For a deeper reference on the term itself, ForexMechanics keeps a glossary entry on the swap.

You are probably thinking now: "if it is a rate gap, surely I can work it out myself?". Partly, yes — you can estimate the base if you know the rates of both currencies. But you cannot guess the broker margin, because it is not published outright. That is why the only reliable number is the one in your broker's swap table, ideally checked just before you open the position. Brokers recalculate their tables regularly — some daily, some once a week — and revise them after central bank decisions, so a point from six months ago may no longer apply. I lay out the full mechanic of the charge itself — what a swap is and when it works in your favour — in the article on the forex swap.

What to do tomorrow

  1. Open your broker swap table and write down the long and short point for the pairs you trade. Most platforms show it in the instrument specification or on a terms page. Note the values for two or three of your main pairs, separately for the long and the short side, so you have them at hand before you click buy or sell.
  2. Calculate financing from the instrument's actual schedule. Record long/short rate, billing unit, rollover time, multi-day multipliers and holiday adjustments. Apply the specified day weights rather than assuming a triple Wednesday charge for every instrument.
  3. Compare the swap tables of two brokers on the same pair. Visit the terms pages of two regulated brokers and line up the point for EUR/USD or USD/PLN. The difference you see is exactly the margin this article describes — and a concrete number to weigh if you plan a position strategy built on the carry.
  4. Check whether your broker uses a triple swap day other than Wednesday. Look in the specification or ask support, because a few brokers shift the triple charge to a different day for selected instruments. It takes five minutes and saves an unpleasant surprise when you plan an entry right before the weekend.