How swap rates affect longer-term strategies
Overnight financing accrues daily, so for position traders it often dwarfs the spread.
Swap comes from the interest-rate differential between the two currencies plus the broker's markup. Holding the higher-yielding currency can earn a positive swap; the opposite side pays. For leveraged gold and index products, the charge is usually driven by financing rates and is negative on both sides. Most brokers apply a triple charge on Wednesdays to cover the weekend value date.
Take a position held for 30 trading days: at -7 USD per lot per day, financing alone costs -210 USD, typically several times the round-trip spread. That is why two brokers with near-identical spreads can differ by more than 30% in annual cost for a position-trading account.
Three practical steps: quote the current swap for the instrument instead of relying on historical values; compare total daily cost across account types (raw spread plus commission versus spread-only); and include swap in the backtest parameters for any strategy expected to hold beyond a week.