The daily amount paid or received from an interest rate gap
Swap points are the daily amount you receive or pay because the two currencies in a position carry different interest rates. Buy the higher-yielding currency against the lower one and you receive; do the reverse and you pay. The gap changes as central banks move their policy rates, and a credit can turn into a charge. It is small next to the movement of the rate itself, so it does not offset a falling position.
With a 4% rate gap, a $1,000,000 position earns roughly $40,000 over a year.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.