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Centrino Capital

Swap Rate Definition

The swap rate is the interest adjustment applied to a position held open overnight, based on the interest rate differential between two currencies or markets.

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What is a Swap Rate?

Swap rates can be positive or negative depending on the direction of the trade and the underlying interest rates involved.

They are an important cost consideration for positions held over multiple days.

Example of Swap Rate

A trader holding a long position in a higher-yielding currency overnight may receive a positive swap credit.

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