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A swap in Forex trading is an interest rate earned or charged when keeping a trade position open overnight. 

What are Short Swaps? 

• A SHORT SWAP is when you leave a Sell POSITION open overnight. 
• The amount earned or charged will vary according to the instrument you are trading. 

Calculating SHORT SWAP: 

• Equation: ONE POINT X TRADE SIZE X SWAP SHORTS IN POINTS. 
• Example: EURGBP: 0.00001 X 100000 X 0.61 = $0.61.
• This means that you will earn $0.61 for keeping 1 Lot overnight on a Sell Position on EURGBP.

What are LONG SWAPS?

• A LONG SWAP is when you leave a BUY POSITION open overnight.
• The amount earned or charged will vary according to the instrument you are trading.

Calculating LONG SWAPS: 

• Equation: ONE POINT X TRADE SIZE X SWAP SHORTS IN POINTS. 
• Example: EURGBP: 0.00001 X 100000 X 4.11 = $4.11.
• This means that you will have to pay $4.11 for keeping 1 Lot overnight on a Sell Position on EURGBP.

If you wish to know more regarding where to locate the fees for Short or Long Swaps for any specific instrument, click here.