Forex Overnight Financing Cost Calculator
Rollovers, swaps, and carry interest can flip a profitable trade into a loss if the financing side of a position is ignored. Enter your trade direction, notional size, interest rates, and holding period to preview the financing debit or credit applied each night. The tool echoes the terminology used by major brokers and complements the forex pip value calculator and forex position size calculator, giving traders a three-part toolkit for planning both price and financing outcomes.
Why overnight financing matters in forex trading
Retail forex platforms quote two prices for every currency pair, a bid and an ask, and allow positions to be left open indefinitely as long as the trader meets margin requirements. When a position spans the New York 5 p.m. rollover, the broker applies a financing adjustment to account for the interest rate differential between the two currencies. Traders often focus on the pip value and leverage profile of a trade without modeling this seemingly small adjustment. Yet financing fees accrue every single day, scale with position size, and can dramatically reshape the break-even level. A carry trade designed to harvest interest rate spreads relies on these credits. Conversely, a short-lived position that overstays its welcome can erode profits when held through several rollovers. This calculator exists to demystify the overnight component so traders can treat financing as a first-class input rather than a surprise line item on their statement.
Most brokers publish indicative swap rates, but they usually reflect a combination of central bank rates, internal funding costs, and daily adjustments for weekends or holidays. By accepting raw interest rate assumptions and the actual position size in base units, the calculator gives traders a transparent baseline. You can compare the theoretical financing with the swap schedule offered by your broker and spot any discrepancies. It also highlights how non-zero interest rates on the account currency affect the bottom line. Many long-term carry traders park their profits in an account currency that itself earns interest; factoring that yield into the analysis ensures you are comparing net financing flows rather than focusing solely on the traded pair.
Understanding the financing formula
Overnight financing relies on simple interest. The difference between the base currency rate and the quote currency rate is applied to the notional value of the position. A long position effectively borrows the quote currency to buy the base currency, so the trader pays the quote rate and earns the base rate. A short position flips the roles. The calculator converts annual percentage rates into a daily rate using the selected day-count convention and then multiplies by the number of days held. A contract multiplier scales the calculation when you trade fractional lots. Finally, we translate the financing into both base and quote currency terms using the exchange rate so you can reconcile the adjustment regardless of how your broker displays it.
The core formula is presented below, where with representing the position size in base units, the contract multiplier, the annualized base currency rate, the quote currency rate, the selected day-count base (360 or 365), and the number of days held. The sign of the financing flips when the trade direction changes because the rate differential switches roles.
The calculator also optionally applies the account currency rate to the resulting financing cash flow to show the opportunity cost of leaving funds idle. This is particularly useful when your account currency is different from the quote currency of the pair you traded. Imagine holding a long EUR/JPY position in a USD account. The financing credit arrives in JPY, is converted to USD at the spot rate, and then sits in the account until withdrawn. If USD cash yields 4% annually, that money continues earning while it remains on deposit. Adding the account currency rate therefore presents a more holistic picture of the total carry you experience.
Worked example
Consider a trader who buys 120,000 EUR/JPY at an exchange rate of 145.20. The broker defines a standard lot as 100,000 units, so the contract multiplier of 1.2 correctly reflects the slightly oversized position. The trader plans to hold the position for 12 calendar days over a stretch that includes one weekend. The European Central Bank’s policy rate is 3.75% while the Bank of Japan maintains a negative rate of −0.10%. Assume a 360-day convention for simplicity. A long EUR/JPY position earns the base rate (EUR) and pays the quote rate (JPY). Using the formula above, the financing credit equals . The net effect is a positive credit of roughly €187.20. Converting to JPY at 145.20 results in about ¥27,167 credited to the account at the end of the holding period. If the account currency is USD earning 4% annually, that ¥27,167 converts to around $187.15, and the time value of money over 12 days adds roughly $2.46 in opportunity yield. The trader can compare that figure with expected price appreciation to determine whether the carry justifies holding through the weekend.
Comparison of financing scenarios
Financing outcomes change quickly when rates shift or when the trade direction flips. The table summarizes three common situations based on a 100,000-unit trade with a 1.0 multiplier held for five days on a 360 day-count basis. Each scenario shows the net financing in base currency, assuming the position is long. Short trades simply reverse the sign.
| Currency pair | Base rate (%) | Quote rate (%) | Net financing | Observation |
|---|---|---|---|---|
| AUD/JPY | 4.10 | -0.10 | +570.83 AUD | Classic positive carry on long positions. |
| EUR/USD | 3.75 | 5.25 | -208.33 EUR | Higher US rates penalize EUR longs. |
| GBP/CHF | 5.00 | 1.75 | +451.39 GBP | Carry remains favorable despite strong franc. |
These figures demonstrate why financing is not simply a footnote. A trader planning to hold EUR/USD long for a week must recapture more than 200 euros in price gains just to offset the financing headwind. In contrast, a GBP/CHF carry strategy can earn almost half a percent of the notional in under a week even if price action stays flat. The calculator makes these tradeoffs explicit and encourages traders to choose directions aligned with their macro view of interest rate spreads.
Defensive input validation
Forex data involves negative rates, fractional lots, and multi-day holding periods that sometimes exceed a year. The calculator therefore accepts negative percentages and day counts up to ten years. When any field is left blank or set to an impossible value, the error message above the form points out the problem while the last valid result remains visible below. This respect for previously computed results mirrors the workflow of traders who tweak assumptions repeatedly to stress-test a position. It also ensures the calculator remains usable on mobile browsers where accidental taps can temporarily clear an input.
Because rollovers are applied even when markets are closed, the calculator treats the holding period as calendar days rather than trading days. You can test weekend and holiday impacts by changing the day count while holding other assumptions constant. The inclusion of an account currency rate also doubles as a lesson in cash management: leave idle balances in a zero-yield account and the opportunity cost of carry trades grows quickly. Pair this tool with the currency exchange fee comparison calculator to capture conversion costs and the interest rate parity calculator to cross-check whether the forward points implied by financing align with theoretical expectations.
Practical tips for interpreting results
Treat positive financing as a buffer rather than guaranteed profit. The credit offsets spreads, commissions, and slippage, but exchange rates can still move sharply against you. When financing credits accumulate, consider whether to reinvest them or hold them aside as a volatility cushion. Conversely, if the calculator reveals a large daily debit, think about scaling down the position using the contract multiplier or exiting before the rollover cutoff. Long-dated swing trades often make sense only when the financing charge is mild relative to expected price movement. Checking the numbers in advance helps determine whether the trade is fundamentally a carry play or a directional speculation.
Finally, revisit your assumptions whenever central banks adjust policy rates. A surprise rate hike in the quote currency can flip a positive carry into an overnight cost. The calculator makes it easy to plug in revised rates and see the effect immediately. Keeping the form loaded on a phone or tablet allows traveling traders to run quick what-if scenarios before dinner or between meetings. The more frequently you update your inputs, the more accurate your expectation of financing will be, and the less likely you are to be blindsided by a swap adjustment on your statement.