What is rollover?

What is rollover and swap? Would anyone can explain me with an example?

Hi Hiron…welcome.With regards to your question I suggest
you go check under the education section.There’s a section
below called Forex Glossary.Search under R for the term roll over.
That should answer your question.Hope that helps… :slightly_smiling_face:

The rollover rate is the cost of holding a currency pair overnight. On the other hand, the swap rate is the rate of interest that is to be paid when one currency is exchanged for another. You can check the forex glossary list to clear your doubts and get a better understanding.

When you buy or sell an asset in your MT4 trading platform what you basically do is entering into a contract which name is CFD with a counterparty (market maker). Some CFD contracts have maturity dates - if you hold a contract till the expiration date your position will be forcedly closed and any profit/loss settled with your counterparty. Naturally there are traders who may be willing to continue holding position open on the expiration date and after.

To do that a trader would need to manually enter into a new CFD after the old one expires. To simplify this process brokers offer so called rolling CFD - they enter into the new contract automatically but the trader may be required to pay so-called rollover fee. This fee reflects price difference between the old contract at the expiration and new contract.

Swap is a type of rollover fee. Traders are debited or credited swap if they want to keep position overnight. If a trader used leverage (borrowed funds) to open position he has to pay interest for using these funds.

The rollover rate is the cost of holding a currency pair overnight. For better understanding do read it from here Rollover Definition | Forexpedia by BabyPips.com