What is a swap

What is a swap?

A swap means the difference between the interest rates of the currencies in a currency pair you are buying or selling. When you buy one currency, you are selling another currency. Each currency has an interest rate. In general, if the interest rate of the currency you buy is higher than that of the currency you sell, you can earn the swap. However, if the interest rate of the currency you buy is lower than that of the currency you sell, you will be charged the swap. Please note that, in some cases, you need to pay the swap for a currency pair regardless of whether you buy or sell it.

When are swaps calculated?

Swaps are calculated and applied to your account automatically every day at 5:00 AM in Hong Kong time (6:00 AM in winter time). You will earn/pay swaps for positions held before that point of time.

If your position remains open by the market close on Wednesday, a triple swap will be calculated for that day due to the two-day settlement period.

How are swaps calculated?

Futu calculates swaps by using the Point mode.

Here is the formula:

●  Swap = Contract Size * Contract Multiplier * Tick * Swap Point * Number of Days

* Tick: Generally, the tick is 0.001 for JPY-related currency pairs, and 0.00001 for non-JPY-related currency pairs.

For example, if you hold a long position in 0.1 lot of EUR/USD overnight for 1 day, with a swap point of -3.91 points per lot, then

●  Swap = 0.1 lot * 100,000 * 0.00001 * (-3.91 point) * 1 = -0.39 USD

and you will need to pay a swap of 0.39 USD.

If you hold a long position in 0.5 lot of USD/JPY overnight for 3 days, with a swap point of 9.93 points per lot, then

● swap = 0.5 lot * 100,000 * 0.001 * (9.93 points) * 3 = 1490 JPY

considering the USD to JPY exchange rate (supposing USD/JPY = 147.47), as calculated using the price of  USD/JPY at the time of calculation of the swap, then

● swap = 1,490 JPY / 147.47 = 10.10 USD

and you will receive a swap of 10.10 USD.

List of Swap Rates

Click here to view the Swap Rates list.