Forward Outrights
For forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF, for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.
infolinks
AZRA KAHN
Followers
Blog Archive
-
▼
2009
(354)
-
▼
June
(26)
- Housing Starts Housing Starts are a measure of the...
- Retail Sales Retail Sales are a measure of the tot...
- Durable Goods Orders Durable Goods Orders are a me...
- Payroll Employment Payroll employment is a measure...
- Producer Price Index The Producer Price Index (PPI...
- Consumer Price Index The Consumer Price Index (CPI...
- Gross Domestic Product The Gross Domestic Product ...
- Trade Balance The trade balance is a measure of th...
- Trade Balance The trade balance is a measure of th...
- Receive our daily expert view on the global market...
- THEMES TO WATCH – UPCOMING SESSIONUS Jun. prelimin...
- MAJOR HEADLINES – PREVIOUS SESSIONNew Zealand Apr....
- Stronger verbal intervention on the USD and treasu...
- Currencies traded freely on foreign-exchange marke...
- Glossary • Appreciation An increase in the value ...
- Further ReadingTo see how you can trade the Forex ...
- Trading Scenario – Trading Falling Prices If, on t...
- Trading Scenario – Trading Rising PricesIf you bel...
- Important Forex Trading Terms SpreadThe spread is ...
- Why Trade Forex?24 hour tradingOne of the major ad...
- Trading on MarginTrading on margin means that you ...
- Forward OutrightsFor forward outrights, settlement...
- Trading ForexA currency trade is the simultaneous ...
- Overview Foreign exchange, Forex or just FX are al...
- Foreign Exchange This short introduction explains ...
- FOREX RATES Pakistan Open Market Forex Rates Upd...
-
▼
June
(26)
4:31 AM
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment