Certain trading instruments incur higher swap rates midweek due to value date adjustments caused by weekends and market settlement practices.
In the foreign exchange market, transactions typically follow a T+2 settlement cycle, meaning they are settled two business days after the trade execution. For instance, positions opened and held past Monday roll over to Tuesday, covering the period from Wednesday to Thursday. Similarly, positions held beyond Wednesday roll over to Thursday, accounting for Friday through Saturday.
Since global financial markets are closed on weekends, settlements due on Saturday or Sunday are deferred to Monday. As a result, swaps applied on Wednesday account for three days instead of one.
Precious metals, such as gold and silver, which are considered safe-haven assets, follow similar rules. Positions held past Wednesday incur a 3-day swap, just like forex currency pairs.
Other products, including oil, indices, commodities, and stocks, generally follow a T+0 settlement cycle. However, positions held beyond Friday are also charged a 3-day swap to account for the weekend.
Please note: The following is applicable only for MT4 – Due to limitations in MetaQuote software, Friday still reflects a 3-day swap in contract specifications. However, swaps are actually applied separately on Saturday and Sunday as of November 8, 2021.
