forex swap

In finance, a forex swap (or FX swap) is an over-the-counter short term interest rate derivative instrument. In emerging money markets, forex swaps are usually the first derivative instrument to be traded, ahead of forward rate agreements.

Structure

A forex swap consists of two legs:

• a spot foreign exchange transaction, and
• a forward foreign exchange transaction.

These two legs are executed simultaneously for the same quantity, and therefore offset each other.

Uses

Forex swaps are used for hedging currency positions and for speculation.

Hedging

Investors use forex swaps to hedge their existing forex exposures by swapping temporary surplus funds in one currency into another currency for better use of liquidity. Doing so protects against adverse movements in the forex rate, but favourable moves are renounced.

forex brokers

OUR FOREX BROKER.

We act as introducing broker of The Royal Division of IKON GLOBAL MARKETS, Inc.

It is a member of the National Futures Association (NFA) and registered with the Commodity Futures Trading Commission (CFTC) as a Forex Dealer Member/Futures Commission Merchant. IKON GM is a recognized leader in the global foreign exchange and derivative markets. With over 3,000 active clients from across the globe, IKON caters to all investors: Individual to Institutional.

OUR ADVANTAGES

Most competitive online forex brokers offer 2 - 3 pips. IKOM GM offers spreads as low as 0 pip! Less spread means less cost means more profits.

IKON GM partners only with the largest and most famous foreign exchange institutions who collectively represent over 70% of the 3.2 trillion daily global foreign exchange market liquidity. The higher the liquidity, the easier it is to enter and exit the market.