Hi,
In forex exchange, we can see some financial instruments which is divide into various terms:
1.Spot
This trade represents a "direct exchange" between two currencies, which has shortest time frame, involves cash rather than, a contract and interest.
2. Forward
This is one way deal to take risk in foreign exchange is the forward transaction.In this transaction, money does not actually change hands until some agreed upon the future dates. Usually,the date is decided by both the parties and then the forward contract is negotiated and agreed by both the parties.
3. Swap
Two parties exchange curriencies for certain length of time and agree to reverse the transaction. These are not standardized contracts and are not traded through an exchange. A deposit is often required in order to hold the position open until the transaction is completed.
4.Future
Futures are standardized forward contracts and are usually traded on an exchange created. The average contract length is roughly 3 months. Thses are usually inclusive of any interest amounts.
5. Option
A foreign exchange option is derivative where the owner has the right but not obligation to exchange money denominated in one currency into another currency.These is the deepest, largest and most liquid market for options of any kind in this world.
In forex exchange, we can see some financial instruments which is divide into various terms:
1.Spot
This trade represents a "direct exchange" between two currencies, which has shortest time frame, involves cash rather than, a contract and interest.
2. Forward
This is one way deal to take risk in foreign exchange is the forward transaction.In this transaction, money does not actually change hands until some agreed upon the future dates. Usually,the date is decided by both the parties and then the forward contract is negotiated and agreed by both the parties.
3. Swap
Two parties exchange curriencies for certain length of time and agree to reverse the transaction. These are not standardized contracts and are not traded through an exchange. A deposit is often required in order to hold the position open until the transaction is completed.
4.Future
Futures are standardized forward contracts and are usually traded on an exchange created. The average contract length is roughly 3 months. Thses are usually inclusive of any interest amounts.
5. Option
A foreign exchange option is derivative where the owner has the right but not obligation to exchange money denominated in one currency into another currency.These is the deepest, largest and most liquid market for options of any kind in this world.
No comments:
Post a Comment