Swap charges are primarily driven by interest rate differentials. A difference in interest rates between your base and quote currencies is another way to think about the difference in interest rates between your two currencies. It is natural that there will be a difference between the two interest rates, and when we net these differences out and calculate the disparity, you may receive a daily amount of interest on your account. Among the factors that determine this sum are the lot size, the current market price, and the gap between the two interest rates at the time of the transaction. A carry trade relies on this differential.

Rollover interest, also known as swap rate, is calculated in forex trading to account for the interest rate differential between the currencies being traded. The formula for calculating rollover interest involves the interest rate differential, the position size, and the number of days the position is held open. It typically includes multiplying the position size by the interest rate differential and the number of days, then dividing by a standard denominator such as 365 (for daily interest calculations) or 360 (for some currencies). This calculation determines the cost or gain incurred by holding a position overnight, reflecting the opportunity cost of tying up capital.