An order to spot trade (for example, buy) a forex instrument as well as to conduct the opposite transaction (for example, sell) for a fixed price at a later date.

If the first transaction is for a future date, the transaction is a forward-forward contract. Other variations are overnight and tomorrow/next day (tom/next) swaps.

What is a swap? 

A swap is a financial derivative contract where two parties agree to exchange financial instruments or cash flows for a certain period. The most common types include interest rate swaps, currency swaps, and commodity swaps. These contracts are typically used for hedging risk or speculating.

Why are swaps important to consider when trading?

Swaps are important in trading as they offer a way to manage risk, particularly interest rate and currency risks. By exchanging cash flows, companies can hedge against fluctuations in interest rates or exchange rates, stabilising their financial operations. For traders, swaps can be a tool for speculation, allowing them to profit from changes in market conditions. However, swaps are complex instruments and require a good understanding of the underlying risks.

Put this into Practice

    Saxo Capital Markets HK Limited
    19th Floor
    Shanghai Commercial Bank Tower
    12 Queen’s Road Central
    Hong Kong

    Contact Saxo

    Select region

    Hong Kong S.A.R
    Hong Kong S.A.R

    Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

    Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

    The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

    The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

    Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.