Forex rollover is an overnight financing or settlement adjustment applied when a position remains open beyond a provider's stated cutoff. A position can receive a credit or pay a charge. The exact amount depends on the currency pair, direction, product structure, position size, rates, markup, day-count method, account currency and current provider terms.
The economic basis comes from holding two currencies
An FX position is long one currency and short another. Interest-rate differences and the product's funding structure help determine the overnight adjustment. Retail platforms may express the result as money, points or a value per contract, so the label alone does not reveal the calculation.
Long and short adjustments are separate
The long-side value does not have to be the exact positive opposite of the short side. Provider markups, borrowing conditions, conversion and product design can make both directions negative. Check the two current values separately for the exact instrument.
| Input | What must be verified |
|---|---|
| Instrument | The exact currency pair and product |
| Direction | Separate long and short values |
| Contract size | Units represented by one lot or contract |
| Cutoff | Provider time and time zone |
| Posting unit | Money, points, percentage or another method |
| Calendar | Weekend, currency-holiday and settlement treatment |
| Conversion | How the result becomes the account currency |
The cutoff is provider-specific
The platform cutoff may not match local midnight. Server time, daylight-saving changes and maintenance windows can affect what appears. Verify the current time zone and whether the provider changes it seasonally.
Several calendar days can be reflected together
Settlement conventions, weekends and currency holidays can cause a multi-day adjustment to post at once. The shortcut that a particular weekday is always a “triple swap” day is unsafe across every pair and product. Holiday calendars and contract terms can move the relevant treatment.
A calculation needs documented inputs
A general calculation applies the published rate or point value to the position size and chargeable days, then follows the provider's conversion method. Because platforms quote inputs differently, no single formula can be used correctly without the instrument specification.
Rollover belongs in the trade plan
An overnight cost can alter the expected reward of a multi-day position. Include it with spread, commission and slippage. Pips and spreads owns the immediate quote cost, while backtesting transaction costs explains holding charges in simulations.
Verification checklist
- Open the current specification for the exact instrument.
- Record long and short rollover separately.
- Identify the cutoff and time zone.
- Check weekend and holiday treatment.
- Confirm the posting unit and contract size.
- Estimate the account-currency impact.
- Save the source and date because values can change.
Positive carry is not a complete strategy
A possible credit can be smaller than adverse exchange-rate movement, spread expansion or gap risk. Use trade management and risk management to judge the whole exposure.
Return to Foreign Exchange for the wider OTC structure. Interest rates and financial markets explains how rate expectations affect currencies beyond the overnight posting.
Evidence to use
- The current contract and instrument specification from the exact provider.
- Official central-bank rate sources for rate context.
- BIS markets and foreign-exchange research.