The simultaneous purchase and sale of an identical amount of one currency (base currency) for another (foreign currency) with two different delivery dates (value dates). In the spot Forex market, trades must be settled within two business days, i.e., delivery must be made or taken two days into the future, and therefore it is necessary for positions that are held overnight to be rolled over, or swapped, to avoid actual delivery.

For instance, if a trader sells a specific amount of one currency on Wednesday, he must deliver an equivalent amount on Friday. Some currency-trading systems allow for swapping open positions forward to the next settlement date. The interest rate for such a swap is typically preset (these swaps can be traded on the currency market). The difference between the interest rates of the base and foreign currencies is reflected as an overnight loan. If a trader holds a long position in the currency with the higher interest rate, he would gain on the spot swap. The interest rate differential between the two currencies will determine the day-to-day amount of this gain.

It is also known as a rollover transition or simply as a rollover.