Direct answer
Rollover (often called “swap” or “interest” in forex) is the recurring amount added to or subtracted from a position when it stays open across a rollover point. For low yield currency pairs, the core idea is usually that the higher-yield currency tends to support a positive interest differential while the low yield currency tends to contribute less—so the direction of the interest differential often matters more than the label “low yield.” The exact numeric result is then converted into a daily swap amount using provider conventions and trade timing.
Mechanism and definitions
Rollover / swap is the interest-related adjustment that happens when the value date for a trade is rolled forward to the next settlement day. In practice, many systems express the effect as a swap rate for the long side and a separate swap rate for the short side.
1) Start from the interest-rate differential idea
A simplified way to understand the calculation is:
- Determine which currency has the higher and which has the lower interest rate.
- For a given position (long or short), the swap reflects the difference between carrying costs/benefits.
This is the stable “mechanics” part: rollover is not a profit prediction, but a systematic accounting adjustment linked to interest-rate assumptions.
2) Convert the interest differential into a daily swap amount
Even if the underlying logic is interest differentials, the platform must translate it into a daily convention. Common inputs include:
- Tenor and day-count convention (how the day fraction is counted)
- Number of days being rolled (usually one, sometimes more)
- Position size and contract notional
A typical accounting pattern is that the daily swap rate for the direction of the trade is multiplied by the position notional, yielding a credited (positive) or debited (negative) amount.
3) Apply “triple swap” conventions (timing-based)
Many rollover systems use an extra convention on particular days so that accumulated interest across a weekend or non-business days is reflected. This is often described informally as a “triple swap” (the multiplier is often 3× for the affected rollover day, but you must rely on the provider’s stated convention rather than assume it).
So, for low yield currencies, the sign and direction come from the differential logic, while the day-specific multiplier comes from the provider’s rollover schedule.
4) Provider adjustments can change the final number
Even when the interest-rate logic is clear, the amount you see is typically influenced by provider-side factors such as:
- how they publish/compute swap rates,
- any markup/commission embedded in the swap,
- and how execution time aligns with the rollover cutoff.
This is why two accounts or providers may show different rollover amounts for the same currency direction on the same day.
Evidence or example (with explicit assumptions)
Because you asked about “how rollover is calculated,” here is an educational example using placeholders, not live numbers.
Assumptions (you would replace these with your provider’s published values):
- You hold a position sized at a notional where the platform’s swap-rate conversion yields: 0.50 per day for the direction you hold.
- The provider’s schedule applies a triple convention on one rollover day.
Example timeline:
- Day 1 rollover: credited/debited amount = 0.50 (1×).
- Day 2 rollover (triple-swap day): amount = 0.50 × 3 = 1.50.
- Day 3 rollover: amount = 0.50 (1×).
Key takeaway: the “low yield” label mainly helps you anticipate that the interest differential often trends one way, but the visible rollover math depends on the published swap rates, the trade direction, and the rollover schedule.
Limitations and risks (material failure modes)
- Timing/cutoff effects: If your trade is opened or closes near the rollover cutoff, the platform may apply the swap to a different set of days than you expected. 2) Provider convention differences: Swap rates can be computed and presented differently across providers, including how daily amounts are derived from the underlying interest-rate assumptions. 3) Hidden adjustments: Some systems incorporate operational costs or spreads into the swap/fees presentation, so the swap you see is not a direct “pure interest differential” calculator.