What is Swap? What is Islamic Forex? | Forex Swap Calculator

what is forex swap
what is forex swap

swapis a term that we encounter most in financial markets and that many investors do not know. For this reason, investors hear the question of what is a swap.

The market in which the term swap is used the most is the forex market. In this article, we will tell you the details you need to know about swap. We recommend that you read our article carefully.

What is Swap?

The word swap that we hear frequently is expressed as changing and swapping. Of course, it is used in the markets in a way that can have close meanings.

We would like to tell you in detail what is swap in forex. First of all, we should say that there are currency pairs in forex and there are different interest rates in each currency. Interest rates are determined by the central banks of the countries to which their currencies are tied.

Since the interest rate of each currency is different, interest differences arise in currency pairs. Interest rates are also called swaps in forex. We can say that it is also expressed as transportation cost.

The swap value changes according to the currencies in the currency pair and the transaction. It does not always appear as a cost, but sometimes it may appear as an interest income.

Here, the interest differences of the currency units traded are important. According to the transaction, interest increases or interest decreases and a swap is determined accordingly.

Let's say you are trading the EURUSD parity. If you open a buy transaction while trading in this parity, you will buy Euros and give TL. If you make a sale, you buy TL and sell Euros.

When you make a purchase, you buy Euros and face swap cuts because the interest rate of Euro is much lower than TL. When you make a sale, you get swap income because the interest rate of TL is much higher than that of Euro.

Therefore, the parity you trade and the transaction made affect the swap status.

Swap price arises due to the interest earned or paid by forex companies as a result of investing their assets in different currencies according to your transactions. This price is also reflected to the investors.

Now too what is swap After learning, let's explain the important rules.

First of all, swap is also known as overnight interest. Because the resulting swap fee is reflected in the account overnight. However, on Wednesdays, it is reflected in the account for 3 days. This is because the prices on Saturday and Sunday are reflected on Wednesday.

The swap fee is not reflected in the transactions that are opened and closed on the same day and not kept until the night.

investors how to calculate swap You can also ask questions. The answer is very simple. This information is provided on the trading platforms used.

Since MetaTrader platforms are generally used, we can give an example over this. When you enter the symbol properties section in the application, you can see the swap values.

You can also see it when you press and hold on the parity traded in the mobile application.

There is also a swap-free forex account used in the forex market. Let's take a look at that account.

What is Swapless Forex?

Swap-free forex, as the name suggests, is the type of account where there is no swap. There are no swaps or interest in these accounts. Thus, investors can trade without interest.

Since there is no interest, investors do not have to examine the interest rates of the currencies in the parity they are trading and can perform their transactions comfortably.

Most companies can have swap-free accounts. It is also called Islamic forex. Because the use of interest is generally preferred by investors belonging to the Islamic religion, as it is not tolerated.

To use a swap-free forex account Olive Markets and companies like XM Forex.

Rail Industry Show Armin sohbet

Be the first to comment