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FINANCIAL MARKET COURSES

FX Forward Market - Short-Dated Outrights & FX Swaps

Some short-dated currency trades allow for settlement taking place before the spot value date. Instruments such as forward outrights and FX swaps are typically used for trades that settle after the spot value date. However, with some adjustments, these instruments can be used for short-dated trades. This course describes the mechanics of this in detail.

  • OBJECTIVES

    On completion of this course, you will be able to:

    Describe the challenges associated with pre-spot settlement in the FX market

    Explain the terms used for short-dated trades, such as "spot/next" and "tom/next"

    Outline how a short-dated trade is priced

  • COURSE OUTLINE

    Topic 1: Trading for Settlement Before Spot

    Is the Delivery Deadline Achievable?

    Early Settlement: An Example

    Forward Rates & Interest Differential

    Finding the Short-Dated Outright Price

    Topic 2: Pricing Short-Dated Trades

    Short-Dated Trades: Terminology

    Short-Dated Trades

    Pricing Short-Dated Trades

    o Pricing a Short-Dated Swap

    o Pricing a Short-Dated Outright

  • PREREQUISITE KNOWLEDGE

  • ESTIMATED COMPLETED TIME

    60 Minutes

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