What is swap?

Swaps are derivative contracts in which two parties exchange financial instruments, such as interest rates, commodities, or foreign exchange.

 

its a good reply from all with exact information , got some fine lines. thank you for nice post.

 

https://www.investopedia.com/

this is a good place to look for the answer

 

In short, if you want to keep your trade open overnight, you pay extra charge for it. Think of interest that you are paying back

 

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Exactly;
a bit like insurance , good premium to be earned in over nite holds......................................................NOT suitable for all investors/traders.

 

Swap fee (also called rollover fee in this context) is the interest rate difference between two currencies of the Forex pair you are trading. Clients will pay and earn interest for both currencies (for borrowing one and lending the other). It is charged when you keep a position open overnight.

 

A foreign currency swap is an agreement to exchange currency between two foreign parties. The agreement would be consisting of swapping principal as well as interest payments on a loan which would be made in one currency for the principal as well as interest payments of a loan of equal value in another currency.

 

There are a few brokers which started offering swap free accounts to muslim majority regions.

 

its a very fine reply from all about swap. nice post. thanks

 

Thanks for your appreciation. I am happy that my reply was helpful to you. Let's gain and share our knowledge in here.