Forex swaps, also known as rollover swaps or overnight swaps, are interest rate differentials used in forex trading to calculate the cost or profit of holding a position overnight. When traders hold positions past the end of the trading day, they may incur or earn swap charges based on the interest rate differentials between the two currencies being traded. Swaps are typically used to offset the cost of borrowing one currency and earning another or to adjust the net exposure of a trading portfolio. Understanding forex swaps is important for managing trading costs and maximizing potential profits in the forex market.