What is Swap?
The interest paid (or earned) for holding a forex position past the daily 17:00 ET rollover.
Swap (also called rollover or overnight financing) is the interest charged or paid for holding a forex position past the daily 17:00 New York time rollover. The rate is the difference between the interest rates of the two currencies in the pair, plus the broker's markup.
Long EURUSD when EUR rates are lower than USD = pay swap (negative). Short EURUSD when EUR rates are lower than USD = earn swap (positive). Swap is applied 3x on Wednesday to cover the weekend (Saturday + Sunday). Some brokers do 3x on Friday instead.
Swap-free accounts (also called Islamic accounts) eliminate swap charges for traders whose religion prohibits interest. Brokers offer them at most jurisdictions but compensate via slightly wider spreads or a fixed administrative fee. For swing traders holding for days-to-weeks, swap can be material — a daily $5 swap × 30 days = $150 of cost per lot.