A swap-free account, also known as an Islamic account, is a type of trading account that is designed to meet the requirments of traders who adhere to Islamic Sharia law. Therefore, swap-free accounts are designed to allow traders to hold positions overnight without earning or paying interest. Swap-free accounts are available at MEGAFX.
In the foreign exchange (forex) market, overnight trades are those positions that remain open after the end of the trading day. When a trader holds an overnight position, the broker may charge a fee known as a swap rate or rollover fee. A swap rate is the interest rate differential between the two currencies being traded.
When a trader buys a currency with a higher interest rate and sells a currency with a lower interest rate, the trader gains the interest rate differential. Conversely, when a trader buys a currency with a lower interest rate and sells a currency with a higher interest rate, the trader pays the interest rate differential. If a trader holds a position overnight, it will automatically roll over the position to the next trading day and the trade's price will be adjusted to reflect the overnight interest rate differential.