Swap rates (also called rollover rates) are the interest charges or credits applied to positions held overnight. They result from the interest rate differential between the two currencies in a pair.

When you hold a position overnight, you effectively borrow one currency to buy another. The swap reflects the cost of borrowing minus the return on lending.

Positive swaps (credits) occur when you buy a currency with a higher interest rate against one with a lower rate. Negative swaps (charges) occur in the reverse scenario.

Wednesday swaps are typically charged at triple the normal rate to account for the weekend settlement period. This is known as the "triple swap day."

Carry traders specifically target pairs with favorable swap rates, holding positions for extended periods to earn the interest rate differential as additional profit.