Why it matters
Swap turns time into a risk input. For small-edge strategies, financing can convert a ‘flat’ trade into a losing one.
Operational use: this is how the market taxes urgency. When it appears, slow down or size down.
Common trap
Ignoring financing because ‘it’s small’. Over many trades or long holds, it becomes a structural drag (or tailwind).
Example
You hold a position for a week. Price ends near entry, but swaps accumulate. Your P&L is negative even though your chart says ‘break-even’.
Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.
Notes
Quick rule
- If you see this repeatedly, you are in a different regime than your model assumes.
- Regime change usually means position size change.
- When in doubt: trade smaller, or don’t trade.