ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Spot, forward, swaps
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Spot, Cash, OTC
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Spot, forwards, Futures
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Spot, futures & options
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Detailed explanation-1: -Type of Forex Markets Three are three key types of forex markets: spot, forward, and futures.
Detailed explanation-2: -There are four main types of forex trading strategies: scalping, day trading, swing trading and position trading. Different trading styles depend on the timeframe and length of period the trade is open for.
Detailed explanation-3: -FX swaps mature within a year (providing “money market” funding); currency swaps have a longer maturity (“capital market” funding). A forward is a contract to exchange two currencies at a pre-agreed future date and price. After a swap’s spot leg is done, what is left is the agreed future exchange – the forward leg.
Detailed explanation-4: -In finance, a foreign exchange swap, forex swap, or FX swap is a simultaneous purchase and sale of identical amounts of one currency for another with two different value dates (normally spot to forward) and may use foreign exchange derivatives.