Reply To: What are overnight fees?
Overnight or swap fees are charges you pay when you keep a position open past the end of the trading day.
These fees are based on the interest rate difference between the two currencies in a forex pair or the cost of holding a leveraged position in other markets.
If the interest rate on the asset you’re buying is higher than the one you’re selling, you might earn a small amount instead of paying a fee.
You usually pay a small percentage to hold your trades overnight. These fees can add up over time, so factoring them into your trading strategy is essential – especially if you’re a swing trader.
However, swap fees are not charged on all instruments.
They are most commonly applied in forex trading, reflecting the interest rate difference between two currencies in a currency pair. Swap fees can also apply to commodities, indices, and stocks if you are using leverage.
Specific trading instruments, like spot cryptocurrencies or real stocks/ETFs, typically do not have swap fees because no borrowing is involved.
Always check with your broker to see which instruments have overnight charges.