The attractiveness of the Forex market lies in the fact that you can pay for concluded transactions with a deferred payment, that is, legally you are already the owner of the currency, and you will pay for it later.

This approach makes it possible to make a profit even without having the required amount of funds at your disposal, by concluding a counter transaction at a more favorable price.

One of the most common options for carrying out operations on foreign exchange market are spot and swap contracts, their main difference is in the timing of delivery and payment of the subject of the transaction.

Trade big only with a leading broker

Spot– from the name itself it is clear that payments for this transaction must be made immediately, but in practice, payment under the contract can be made within two banking days. This does not take into account weekends and holidays.
The date of settlement is agreed upon at the conclusion of the contract and, depending on what day it will be carried out, the transaction may be called:

TOD– short for today, payment is made on the date of conclusion of the contract, that is, immediately.

VOLUME– in the full version tomorrow, all settlements for this type of spot transaction are made on the next business day after the conclusion of the contract, while the date and exchange rate at which the exchange took place is strictly fixed in the supply agreement.

On the second day– that is, the day after tomorrow, this is the deadline for the calculation to be carried out briefly forward transactions forex type spot.

This option trading operations classified as urgent, sometimes they are also called cash or cash transactions, although all payments for them are made in non-cash form.

Swap– long-term type of transactions for the sale (purchase of currency), in contrast to the previous trading option, the conclusion of such a contract provides for the supply of currency for a period of up to one year.

The delivery date of each type of currency is negotiated separately, depending on which currency is the base one and which one is quoted in the currency pair. The base currency is usually delivered first, and payment for its delivery is made later, at the agreed time.

For example, a contract was concluded for the supply of euros for US dollars at a price of 1.3245 per euro and a volume of 10 standard lots.
The value date (actual delivery of euros) is August 10, and the date of completion of the transaction or closing of the swap contract will be August 15 of the same year.

When concluding contracts of this type, such parameters as the volume of the transaction, the exchange rate, the difference in interest rates on the base and quoted currency are taken into account.

There are quite a few options for concluding transactions using the spot system:

By time – long-term, short-term.

By type - standard or forward (first there is settlement of the transaction, and then the actual delivery of currency).

In terms of value – negative or positive depending on the values ​​of lending rates.

This type contracts can also be used in the credit or interest rate markets.

You can find out more about this type of operation by looking at

SPOT- currency transactions with immediate delivery. They account for up to 90% of the volume of foreign exchange transactions. This is the purchase and sale of currency on the terms of its delivery by counterparty banks, usually on the second day from the date of conclusion of the transaction at the rate fixed at the time of its conclusion. In this case, working days are counted for each of the currencies involved in the transaction, i.e. if the next day after the date of the transaction is a non-working day for one currency, the deadline for the execution of the transaction, delivery of currencies - datevalue increases by 1 day, but if the next day is a non-working day for another currency, then the delivery time is increased by another 1 day. A type of spot transaction is cash transactions in the form of cash purchase and sale foreign currency usually at exchange offices or banks. There are also: Today transactions with delivery of currency on the day of conclusion; tomorrow transactions with the condition of delivery of currency the next day after its conclusion.

Forward– a forward currency transaction in which the parties agree on the delivery of a specified amount of foreign currency within a certain period after the conclusion of the transaction at the rate fixed at the time of its conclusion. Thus, a transaction with a term exceeding the term of the transaction on the spot market (> 2 days) can be considered a forward agreement, provided that for both currencies the term specified in the contract falls on a trading day.

Features of a forward transaction

time interval between conclusion and execution

strictly fixed exchange rate

decentralized market

mandatory

Currency quotes for forward transactions

The exchange rate for futures transactions differs from the rate for spot transactions. The difference between exchange rates for forward and spot transactions is called “forward margin”. It is defined as a discount ( discount ) from the spot rate when the forward transaction rate is lower, or bonus , if it is higher. A premium means that a currency is quoted more expensive in a term transaction than in a cash transaction. A discount indicates that the exchange rate for a forward transaction is lower than for a cash transaction.

When quoting the rate of a futures transaction on the interbank market, only the premium or discount is determined. When directly quoting the exchange rate for a forward transaction, the premium is added to the spot rate, and the discount is subtracted from it. When quoting currencies indirectly, the discount is added and the premium is subtracted from the spot rate.

Exchange rates for futures transactions that are quoted entirely in digital terms are called outright courses. The difference between the rates of the seller and the buyer, that is, the margin, for futures transactions is greater than for spot transactions.

Typically, the difference between the spot and forward rates is determined by the capitalized difference in interest rates on deposits in the currencies involved in the transaction. Currency A is quoted at a premium to currency B if the interest rate on time deposits in currency A is lower than the interest rate on deposits in currency B.

17 The essence of swap operations

Swap is a foreign exchange transaction that combines the purchase and sale of two currencies on the basis of immediate delivery with a simultaneous counter-transaction for a certain period with the same currencies. For a swap transaction, a cash transaction is carried out at the spot rate, which in a counter (forward) transaction is adjusted taking into account the premium or discount depending on the dynamics exchange rate. The difference between the spot and forward rates is called the swap rate. It depends on the difference in interest rates over a certain period, since a currency swap essentially means mutual lending by partners in the respective currencies.

Swap operations are convenient for banks: they do not create open position(the purchase is covered by the sale), I temporarily provide the necessary currency without the risk associated with changes in its exchange rate.

Used for:

Commercial transactions: the bank sells foreign currency on terms of immediate delivery and at the same time buys it for a period. For example, commercial Bank, having excess dollars for a period of 6 months, sells them into national currency on spot terms. At the same time, taking into account the need for dollars in 6 months, the bank buys them at the forward rate. In this case, a loss on exchange rate differences is possible, but in the end the bank makes a profit by providing national currency on credit.

Acquisition by the bank of the necessary currency without currency risk (based on coverage by a counter-transaction) to ensure international payments, diversification of foreign currency assets.

Mutual interbank lending in two currencies.

If a client has a demand for loans in a certain currency, and the bank has resources in another currency, it can satisfy loan application, exchanging the available currency for the desired one in another bank through a swap operation.

Commercial banks attract and place funds in foreign currency on the interbank short-term market by entering into swap transactions.

Swap operations are performed not only with currencies, but also with interest rates. The essence of an interest rate swap is that one party agrees to pay the other interest at LIBOR in exchange for receiving interest at a fixed rate in order to profit from the difference between them. In this case, a party with medium-term investments at a fixed interest rate, but short-term liabilities or liabilities at a floating interest rate, insures its interest rate risk by “buying” a long-term fixed rate or vice versa. Sometimes swap transactions with currencies and interest rates are combined.

In the form of swap transactions, large banks exchange currencies, loans, deposits, interest rates, securities and other valuables.

Swap operations are carried out with gold in order to, while retaining ownership of it, acquire the necessary foreign currency for a certain period.

– this is a type of transaction in which financial settlements are made on the spot, in the shortest possible time. Typically these are currency exchange transactions. Spot transactions are also called cash or cash transactions.

They take place on various financial markets, not tied to a specific exchange, exchanges or the international foreign exchange market.

The term itself became widespread in the last century, when there was a practice of making quick transactions, payment was made instantly, and delivery of goods took no more than two days. The right of two days is still in effect; all agreements on spot transactions must be fulfilled within this period. Although with the development of technology, the supply of goods or financial instruments can be carried out faster, the same rules apply.

In order to avoid misunderstandings between the parties to the transaction, there are some rules:

• It is necessary to indicate which currency to take as the base one.
• The maximum (two days) delivery time must be indicated.
• It is mandatory to indicate which countercurrencies are involved in the transaction.

Spot operations technique

Often, spot transactions are carried out between banks that are constantly in the business of buying or selling foreign currencies. In this case, two days during which it is necessary to complete the transaction are two working banking days. The first day is the date specified when concluding the transaction. Such transactions involving banking organizations have the full name - spot currency.

Spot price is the price at which a stock is bought or sold.

There are three types of spot currency exchange transactions; they differ only in delivery times:

• On the same day - all terms of the transaction are fulfilled on the day of its conclusion; such operations are designated by the abbreviation TOD.
• Next day - all terms of the transaction are fulfilled before the end of the day following the date specified when concluding the transaction; such operations are designated by the abbreviation TOM.
• In one day

The peculiarity of spot transactions is the fastest possible fulfillment of conditions, which is especially convenient when performing foreign exchange transactions in a constantly changing exchange rate.

Produced immediately (within 2 days). Synonym cash or cash transactions. They are the opposite of forward transactions.

Spot transactions are made on various exchanges and in the over-the-counter market: commodity, stock and foreign exchange.

Authorized banks can buy or sell foreign currency, concluding, as stated above, its purchase and sale transactions with the establishment of the delivery of funds for these transactions no later than the second banking day from the date of their conclusion. This type of transactions is called spot (cash, cash) foreign exchange transactions, and the transactions carried out on them are carried out on “spot” terms. Under the name “spot foreign exchange transactions” three types of transactions for the purchase and sale of foreign currency are combined, providing for the supply of funds through them:

1) on the day the transaction is concluded. Such transactions are called TOD transactions, and the rate fixed in them is called TOD (from the English. today- Today);

2) on the next business day after the transaction is concluded. Such transactions are called TOM (TOM) transactions, the rate fixed in them is called the TOM rate (from the English. tomorrow- Tomorrow);

3) one (that is, the second) business day after the transaction is concluded.

Such transactions are called spot transactions (SPOT), or spot transactions, and the rate fixed in them is called spot, or SPOT rate (from the English spot - cash).

Wikimedia Foundation. 2010.

See what "Spot (deal)" is in other dictionaries:

A real exchange transaction with a short delivery period. In English: Spot deal See also: Cash deals Financial Dictionary Finam... Financial Dictionary

"Spot" type deal- Conversion transaction with a value date on the second business banking day after the day the transaction was concluded. Topics: accounting... Technical Translator's Guide

Spot deal is a real exchange transaction with a short delivery period. Dictionary of business terms. Akademik.ru. 2001... Dictionary of business terms

SPOT TYPE TRANSACTION - conversion operation with a value date on the second business banking day after the transaction was concluded... Great Accounting Dictionary

An exchange transaction is a contract (agreement) registered by an exchange, concluded by participants stock trading in relation to an exchange commodity during exchange trading. Registration and registration procedure exchange transactions set by the exchange. ... Wikipedia

- (cash deal) An operation (purchase or sale) on the London Stock Exchange, settlements for which must be made immediately, i.e., as a rule, the next day. Finance. Dictionary. 2nd ed. M.: INFRA M,… … Financial Dictionary

CASH TRANSACTION WITH GOODS- CASH COMMODITY The same as a spot commodity transaction, it means the availability of goods ready for immediate delivery. See. SPOT; SPOT PRICE (CASH) ... Encyclopedia of Banking and Finance

Spot (eng. Spot on the spot) are settlement conditions under which payment for a transaction is made immediately (usually within two days). Spot transactions are also called cash or cash transactions. In the technique of calculations, they are contrasted with urgent ones (also... Wikipedia

Cash transaction- (CASH TRANSACTION, SPOT) 1) one of the types of transactions with securities carried out on stock exchanges. The peculiarity of a cash transaction is that securities are paid and transferred to the buyer, as a rule, on the day of the transaction... ... Finance and stock exchange: dictionary of terms

Spot market- (Spot Market) B modern conditions spot and derivatives markets have become widespread Transactions and price formation on spot and derivatives markets, instruments used by participants in the derivatives and spot markets to conclude transactions... ... Investor Encyclopedia

Depending on the timing of settlements, conversion transactions are divided into cash and urgent.

Cash transaction is a conversion transaction with a value date that is no more than two business banking days away from the day the transaction was concluded. Value date– this is the date determined for the fulfillment of the terms of the transaction.

Cash conversion transactions are divided into:

· TOD transaction – conversion transaction with a value date on the day of the transaction;

· TOM deal - a conversion transaction with a value date on the business banking day following the day the transaction was concluded;

· SPOT deal - a conversion transaction with a value date on the second business banking day after the day the transaction was concluded.

The spot market is a market for immediate delivery of currency. The main participants in this market are commercial banks who conduct operations on the spot market with various partners:

· directly with client companies;

· on the interbank market directly with other commercial banks;

· through brokers with banks and clients;

· With central banks countries

The spot market serves both private requests and speculative transactions of banks and companies. The customs of the cash transactions market are not fixed in special international conventions, but they are strictly followed by all market participants. The customs of the spot market include:

· making payments within two working banking days without accrual interest rate for the amount of currency supplied;

· transactions are mainly implemented on the basis of computer trading with confirmation by electronic notices (advice) within the next business day;

· mandatory rates: if a dealer on a large market is interested in the quotes of another bank, then the quotes announced to him are mandatory for the execution of a currency purchase and sale transaction.

The main instrument of the spot market is electronic transfer through SWIFT channels.(SWIFT – Society For World – Wide Interbank Financial Telecommunications).

Currency operations spot accounts for approximately 40% of trading volume FOREX . The main objectives of spot operations are:

· execution of conversion orders from bank clients;

· translation own funds bank from one currency to another in order to maintain liquidity;

· carrying out speculative conversion operations;

· regulation of the working currency position in order to avoid uncovered account balances;

· maintaining minimum required working balances in foreign banks in NOSTRO accounts in order to reduce surpluses in one currency and cover needs in another currency.

Despite the short delivery time of foreign currency, counterparties bear the currency risk on this transaction, because in conditions of “floating” exchange rates, the rate can change within two business days. Conducting foreign exchange transactions and minimizing risks require certain preparation. The technique for performing them consists of several stages. At the preparatory stage An analysis of the state of foreign exchange markets is carried out, trends in the movement of exchange rates of various currencies are identified, and the reasons for their changes are studied. Based on this information, dealers, taking into account their existing currency position, use computer technology to determine the average exchange rate national currency in relation to foreign currency.

To limit potential credit risk The bank should strive to carry out its transactions primarily with first-class partner banks.

The analysis carried out makes it possible to develop the direction of foreign exchange transactions, i.e. provide a long or short position in a specific currency with which transactions will be carried out. In large banks, special groups of economist-analysts analyze the position of currencies in the markets, and dealers, based on their information, independently choose the directions for conducting foreign exchange transactions. In smaller banks, the analyst functions are performed by the dealers themselves; They directly carry out currency transactions: using communication means, they negotiate the purchase and sale of currencies and conclude transactions.

The transaction procedure includes :

· selection of exchanged currencies;

· fixing rates;

· establishing the transaction amount;

· indication of the currency delivery address;

· value transfer of funds;

· documentary evidence of the transaction.

Spot settlement conditions are quite convenient for transaction counterparties: they are processed within the current and next day necessary information, payment and other telexes are issued to fulfill the terms of the transaction.

Such a system was formed initially, because faster than cans could not make a calculation taking into account the time when the details of the transaction were agreed upon by the parties, the difference between time zones, etc. Although technology has now greatly improved the speed of transactions, most spot trades still take delivery two business days from the trading date. In Russia there is next system settlements for conversion transactions: current transactions are concluded with the value date “today” ( today or TOD), “tomorrow” (tomorrow or TOM ), as well as after 2 business days “spot” ( spot).

Transactions with a counterparty with whom the bank does not have credit lines, can be carried out on the terms split value – split value date, which means the delivery of one currency, for example, for a period tod , and the other is tom .

Transactions with a value date today it is possible to carry out payments throughout the entire working day, since until late it is possible to carry out settlements in dollars (in the USA, due to the time difference, the working day ends much later than in Russia) and in rubles (due to the fact that the cash settlement center of the Bank of Russia , RCC, accepts payments for processing until 21-00 Moscow time). But as a rule, the market USD/RUB “today” settlements close at about 13:00 Moscow time. Individual transactions occur later, but this is usually a matter of the specific short-term interests of individual banks and their agreements with each other.

Settlements for conversion transactions with EUROs must be made earlier, because the time gap with Europe is smaller. According to the directive of the European Banking Federation ( FBE ) European banks set the deadline for settlements to respondent banks ( cut - off time ) in EURO with the value date “today”. This time may vary between 12-16 hours Central European Time ( CET).

In cash transactions, the correct setting of the final settlement date plays an important role. The term "cash" usually refers to such foreign exchange transactions, for which settlements are made on the same day. Initially, this term was used in the markets of North America and in those countries that resort to the services of these markets for foreign exchange transactions due to more favorable time zones for them. The exact spot date is important because the foreign exchange market operates on the basis of the compensated cost principle, which ensures that no one involved in exchange transaction the parties do not provide credit to the other. This means that on the day the London correspondent bank pays the pounds, the American correspondent bank must pay dollar equivalent. However, no matter how hard you try, it is virtually impossible to guarantee that both payments will be received by the respective beneficiaries at the same time. The risk that arises as a result of non-simultaneous payments is called settlement risk.

Given the time difference in the work of banks, the parties are forced to resort to providing an intraday overdraft. On developed money markets interest is accrued only on a daily overdraft, and for an overdraft during the day, no interest is accrued.

A certain adjustment occurs to the spot date if it falls on a weekend. Let’s say if a trade is made on Friday, then the spot day falls on the following Tuesday. The problem arises when Monday is a bank holiday in New York (in which case Russian bank contracts with a New York bank). If Monday is a holiday in New York, and the Russian bank has forgotten about it, then the New York bank sets a New York spot day that falls on Wednesday, not Tuesday. The Russian dealer may consider that the New York dealer has appointed Tuesday, since this is a spot day in Russia. On Tuesday, the London correspondent bank of the Russian counterparty will pay out one million pounds sterling, expecting to receive the dollar equivalent in New York, but will find out that the New York bank will only pay out the money on Wednesday. A correspondent bank is a bank in one country that acts as an agent for a bank in another country.

It would be a different matter if the New York bank had turned to to a Russian bank, since in this case the settlement day would be determined taking into account the fact that for the Russian bank and its correspondent in London, Monday is a working day. Monday might be a holiday in New York, but since it is a banking day in Moscow and London, Tuesday would be designated as the spot day. Thus, banking days The spot date is determined in the country of the quoting bank. One of the parties must ensure that its spot day coincides with the spot day designated by the respondent. To do this, dealers maintain financial calendars, which take into account all non-working days in the countries of their counterparties and correspondent banks.

Thus, for each of the currencies involved in the transaction, only working days are counted, i.e. if the next day after the transaction date is a non-working day for one currency, then the delivery time for the currencies is increased by one day. If the next day is a non-working day for another currency, the delivery time is extended by one more day. For example, for spot trades entered into on Thursday, the value date is Monday.

Table 7

Value date for spot transactions

Operation SPOT 2003		Value date
Monday
Thursday
Friday

The development of telecommunications and electronic interbank transfer systems has made it possible to significantly speed up interbank settlements. Short-term conversion operations appeared. Deal Today carried out on the basis of the course Today . Settlements for such transactions are carried out on the day the transaction is concluded. These transactions are also widely used in ruble/dollar transactions on the Russian domestic foreign exchange market between commercial banks. Upon transaction Tomorrow Currency exchange is carried out the next day after the transaction is completed. This type of transaction is also actively used by Russian commercial banks in ruble/dollar transactions on the domestic foreign exchange market.

Corresponds to current conversion operations exchange rate spot It is the current exchange rate and is displayed on the screens news agencies(best known Reuters ). In international banking practice, the following designation of exchange rates is accepted: for example, the EURO to US dollar exchange rate is denoted EUR/USD , dollar and ruble - USD / RUR , and the pound sterling to the US dollar - GBP/USD . In this designation, the quote base (base currency) is placed on the left, and the quote currency (quoted currency) is placed on the right.

Quotation of spot rates can be direct or indirect.

Direct quotation - the amount of national currency per unit of foreign currency. Typically, currencies are compared to the US dollar: the amount of national currency for one US dollar - here the dollar is the quotation base. The rates of most currencies in the world are officially quoted in the form of direct quotes - USD/CHF, USD/RUB, USD/JPY, USD/CAD etc. The use of the US dollar as the base currency reflects the role American currency as the generally accepted and most commonly used unit of account used in international trade, and also reflects the importance of the dollar as the key currency of the post-war world monetary and financial system of the Bretton Woods era.

Indirect (reverse) quotation - the amount of foreign currency expressed in units of national currency:

indirect quote = 1 / direct quote

This is usually a less common form of writing exchange rates. For example, when using a direct quote, the dollar to ruble exchange rate will look like USD/RUB = 31.7532. When using an indirect quote, the dollar to ruble exchange rate will look like RUB/USD = 1/31.7532=0.0315 rounded to the fourth decimal place. The type of currency quotation (reverse or direct) does not affect either the state of the currency or the level of its exchange rate, because the essence of the exchange rate is the same, and only the form of its expression changes.

In an indirect quotation, the dollar acts as the quotation currency and the other currency acts as the quotation base. A number of currencies are officially quoted against the US dollar in the form of an indirect quotation. This is the exchange rate of the dollar to the British pound sterling, as well as to monetary units countries - former colonies of Great Britain - GBP/USD, AUD/USD, NZD/USD, EUR/USD. For example, GBP/USD exchange rate = 1.5760 means that one pound sterling can be bought for 1.5760 US dollars. The reasons for quoting the pound sterling as a base currency lie in the role english pound as the most common currency of the British Empire, serving the lion's share of world trade. Other countries correlated their currencies with the pound sterling at the beginning XX century, including the USA. Since then, the tradition has remained of calling the pound sterling to dollar exchange rate “telegraph rate” or “cable” ( cable ). The roots of this tradition lie in the fact that in those days settlements between Great Britain and the United States were carried out through telegraphic conversations over a wire ( cable ). Some others currency pairs also have their own names. For example, course American dollar To Swiss franc dealers call dollar-swissy ( Dollar - Swissi).

In addition to standard designations, there is also dealer slang used in negotiations. Dollars can be called "bucks", " dolly ", Swiss francs - "Swissie", New Zealand dollars - "Kiwi"; British pounds may be called "pounds", "sterling" or "cable". Before the introduction of the EURO, French francs were called " paris".

In the foreign exchange market, banks quote exchange rates using two sides - the "bid" ( bid - purchase) and “offer” ( offer), or “ask” (ask - sale), at which the market maker buys and sells the base currency.

Big figure ) - dealers usually do not include this part of the price in the quote. A large figure is indicated only when a transaction is confirmed or in extremely volatile markets where its value is constantly changing. In the example above, the large pattern is represented as 6, although traders may also say that it is 56 or 1.56. In the USA this part is also called the “handle” ( handle).

Points or pips ( pips ), they are also points (points ) - minimal change exchange rate. Traders in the spot market quote the last two digits of the price, sometimes just one. 1 pip = the smallest possible change in the currency quote. For the main traded currencies this figure is 0.0001; For Japanese yen - 0,01.

Spread or margin ) is the variable difference between two quotes, bid and offer. In the example it is 10 points. The spread serves as the basis for the bank to make a profit on opposing trades with customers or other banks.

Bid ) is the price at which the market maker is willing to buy the base currency. Offer/ask ( offer/ask ) - the price at which the market maker sells the base currency.

In determining the actions to be taken with the base currency on the side bid or offer side , important has who quotes the exchange rate to whom. Typically, commercial banks quote rates to their clients - companies individuals, however, in the interbank market, banks also quote rates to each other. The above rule applies to the bank that quotes the rate.

The size of the margin may vary depending on several reasons.

a) Counterparty status. Bank margins are usually wider for bank customers than in the interbank market.

b) Market conditions. In conditions of unstable, rapidly changing exchange rates, the margin size is usually larger.

c) The nature of the relationship between the counterparties. If stable trusting relationships have been established between counterparty banks over a number of years, there are no cases of non-fulfillment of transaction terms, and bank dealers know each other well, then the margin may be narrower. If a bank dealer does not want to make conversion transactions with a certain counterparty, then he will quote a wide spread (beyond the market average), knowingly dooming the counterparty to refusal.

d ) The size of the margin is also influenced by market turnover: the smaller it is, the higher the difference between the rates of the seller and the buyer, and vice versa.

e) The specific currency of the transaction also has a certain impact. The margin is significantly lower for currencies with a high transaction volume.

If currency trading does not cover the costs of any bank, it will equals it is not abandoned, since clients can turn to competing banks for other transactions. The profit of commercial banks from currency trading is generated not only due to margins and turnover, but also due to the significant volume of their own transactions.