What are swap points and how are they calculated?
What are swap points?
Swap points represent the value that is either added to or subtracted from the open position valuation when that position is held overnight. Swap points are calculated at midnight. Instruments on which swap points are calculated include currencies, gold, silver, copper, CFDs on stocks, cryptocurrencies, and ETFs. You can find the exact value of the swap points in the documents section.
How are swap points calculated?
The swap point table includes values that, depending on the transaction direction (buying or selling) and the transaction volume, will be converted to PLN and added to or subtracted from your account.
To see how to calculate the amount that will be added or subtracted daily due to holding a position overnight, see the following example:
Long position on EUR/USD:
You open a long position (long, buy) on EUR/USD. The transaction volume is 1 lot. This means you bought 100,000 euros for dollars using leverage. Then, you want to know how swap points will affect this transaction.
In the swap point table (available in the documents section), check the values for the long position.
In this hypothetical example, for a long position on EURUSD.pro, this value is -2.13% (swap points are calculated in percentage points per annum). To calculate how much your account will be charged each day, you have to divide this value by 360 days and multiply by the nominal value of the position. Let’s assume that the client has a long position - 1 lot of EURUSD.pro. The market price is 1,0850. In this example, the value of swap points per day will be 6,42 USD (1 x 1,0850 x 100 000 x 2/13%/360). The value of the swap points will be converted into the base currency of the investment account.
What does the value of the swap depend on?
The value of the swap depends on the level of interest rates and the broker's margin. The exact value of swap points is provided in the documents section in the relevant PDF file.