My swap changed mid-trade — why, and is that allowed?

Krzysztof opened a long position on a pair where the bought currency carried a high interest rate, and for the first few weeks he saw a small positive credit every morning — the broker was paying him to hold the position overnight. Two months later that same credit first shrank, then flipped sign: now he was the one paying. The position was the same, the lot was the same, the broker was the same. What changed was the swap rate. It was not a platform glitch or a quiet trick — it is the normal behaviour of the market that most beginners never have explained to them. Below I set out why the swap can change mid-trade and whether the broker is allowed to do that.

What the swap point actually is, and why it is not fixed

The swap, in a forex context also called the swap point or the rollover cost, is the amount charged for holding a position overnight. It follows from a simple fact: when you buy one currency with another, you are economically borrowing the one you sell and depositing the one you buy. The difference between the interest rates on those two currencies, adjusted by the broker margin, lands on your account as a positive or negative credit. I broke the mechanics of that calculation down step by step in the article on what a forex swap is.

The central misunderstanding is that a trader treats the rate from the opening day as a price locked in until the end. In reality the swap point is not an entry price but a live rate charged each night against a table the broker publishes today and can change tomorrow. If any component of that table moves between Monday and Friday, the amount on your account moves with it, even though you have not touched the position at all.

The interest rate differential — the first and most important driver

The most powerful lever under the swap rate is the interest rate differential between the central banks of the two currencies. For as long as the Fed, the European Central Bank and the National Bank of Poland hold rates steady, the base of forward points from which the swap is calculated stays relatively stable. The trouble is that central banks do not hold rates forever. Every decision to hike or to cut shifts the gap between the currencies in the pair, and the swap point shifts behind it.

Picture a hypothetical example: you hold a long position on a pair where the bought currency has a rate three percentage points above the sold currency. That gap produces a positive swap. The central bank of the bought currency then starts a cutting cycle, while the central bank of the other currency hikes at the same time. After a few decisions the three-point gap narrows to zero. The positive swap you saw at the start first melts away and then — once you add the broker margin — turns negative while you hold the very same position. This is not a theoretical scenario: it is exactly how rate-differential trades fall apart, which I illustrated using the USD/JPY pair and the carry trade. How a central-bank decision actually feeds through to the market is something I unpack in the article on the impact of a Fed decision on the currency market.

"The rollover rate you pay or receive is a function of the interest rate differential between the two currencies in the pair. When that differential changes, so does the cost of holding the position overnight." — Kathy Lien, Day Trading and Swing Trading the Currency Market, Wiley, 2016.

The money market — quarter-end, year-end and funding stress

The second driver is conditions in the money market, where banks fund their currency positions. The forward points behind the swap should in theory mirror the interest rate differential exactly. In practice they deviate from it when demand for hedging rises or when liquidity gets tight. The Bank for International Settlements described this as a persistent breakdown of covered interest parity — forward points can drift away from the pure mathematics of rates under the pressure of demand for funding in a given currency.

This shows up most clearly at quarter-end and year-end. Banks tidy up their balance sheets, the cost of borrowing certain currencies for those few days can spike, and that feeds through into temporary jumps in swap points. A trader holding a position across the end of December sometimes sees a charge that departs noticeably from what they had grown used to in November. This is not broker manipulation — it is a reflection of what is happening one floor up, in the wholesale market, where FX swaps account for roughly half of all daily turnover.

The broker's decision — margin and the right to update the table

The third driver is the most direct: the broker sets the swap table itself and has the right to update it. The rate you see is a market base widened or narrowed by the broker margin. The broker can adjust that margin, just as it can adjust the reference point it takes from the market. Most sets of terms explicitly state that swap rates are variable and that the firm may change them, sometimes from one day to the next, with no separate notice beyond publishing a new table.

For a retail client this means two things. First, two positions with the same exposure at two different brokers can generate a different swap, because the margins differ. Second, swap is a real, moving cost that is easy to overlook on position-trading strategies — it belongs on the full list of charges I gathered in the review of the real costs of forex trading. If you are comparing brokers or planning to hold a position for a long time, the swap table is one of the parameters worth checking before you fund the account.

The triple swap on Wednesday — not an error, just weekend booking

A separate source of surprise is the triple swap charge on Wednesday. It looks like a mistake — a credit three times the usual size on a single day — but it is deliberate mechanics. Settlement of a currency trade runs on a two-business-day basis. A position held overnight from Wednesday into Thursday carries a settlement date that, under two business days, skips across Saturday and Sunday. To keep the financing aligned with the number of days to settlement, the broker books three days of swap at once on Wednesday.

For a position held for several weeks this has a concrete accounting consequence: every full week contains one triple day. If you are working out the financing cost of your position, do not simply multiply the daily rate by the number of days — include the triple Wednesday, or you will understate the tally by more than one seventh. Some brokers apply the triple day on a date other than Wednesday for selected instruments, so it is worth checking in the specification of the specific symbol.

What to do tomorrow

1. Open your broker's swap table and write down the rates for your pairs. Go into the instrument specification on the platform and list the swap points separately for the long and the short side on the two or three pairs you trade most often. It is five minutes of work, and it gives you a reference point so that you immediately notice when the rate changes.
2. Work out the real swap cost for your longest open position. Take the current daily rate, multiply it by the number of nights and add one triple day for every full week you hold it. Compare the result with the profit you expect from the price move — if the swap eats a meaningful share of that profit, you have a reason to rethink the time horizon of the position.
3. Mark the next Fed, ECB and National Bank of Poland decisions in your calendar. Check the meeting dates of the central banks behind the currencies you hold and treat them as checkpoints for the swap. After each decision to change rates, go back to the swap table and check whether your positive credit has started to melt away or dropped below zero.
4. On any position held longer than a month, set yourself a weekly swap review. Once a week, ideally after the Wednesday triple charge, glance at the total swap on the account. If the cost is rising faster than you assumed at the open, decide deliberately whether it still pays to hold the position, rather than discovering it only at the close.