Why is a triple swap charged?

Updated on October 12, 2023

In trading, swaps are like adjustments made to your trade when it’s held overnight. These swaps can be classified as double swaps or triple swaps.

A double swap represents the typical adjustment made each night for holding a trade, which can either be in your favor or against you, depending on the interest rate differential.

Conversely, triple swaps are a unique case that occurs on Wednesday nights. When we talk about triple swaps, it means traders are subject to a slightly more extensive adjustment that accounts for three days: Wednesday night, Thursday night, and Friday night. This extended adjustment is primarily to include the interest over the weekend when trading markets are typically closed. It, too, can be either positive or negative.

The triple swap is calculated by multiplying the standard daily swap rate by three.

Here is an example of how a triple swap might work:

  • Let’s say you open a long position on EUR/USD on Wednesday at 1.1000.
  • The standard daily swap rate for EUR/USD is -0.1 pips.
  • Therefore, if you hold your position open overnight on Wednesday, you will be charged a triple swap of -0.3 pips.
  • This means that your position will be debited or credited with $300 per lot that you are trading.

If you are planning to hold a position open over the weekend, be sure to factor in the triple swap charge into your trading plan.

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