Swap-Free Administration Fee

A swap-free administration fee is the charge that replaces overnight swap on an account structured to avoid interest. Because the objection is to interest rather than to cost, brokers substitute a flat administrative charge — typically quoted per lot, per night, and often applied only once a position has been held beyond a grace period of several days. The substitution is not automatically cheaper or dearer than the swap it replaces. A flat per-lot charge is indifferent to the interest-rate differential, so it can cost far more than the swap on a pair where the differential is small, and far less on one where carrying the position is expensive. Two details decide the outcome: which instruments the swap-free treatment actually covers, since exotic pairs, metals and indices are commonly excluded, and how long the grace period runs before the fee begins to accrue.