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Short courses>Foreign exchange & Non deliverable forwards

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Foreign exchange  & non deliverable forwards - 2.5 hours

A foundation course that explains the foreign exchange market, how trades are done, where the rates come from, the risks and trading and hedging uses for these products.

It is suitable for those working in or around financial markets who need to know more.

There are simple examples with time for questions and answers.

This course is only available in-house and is suitable for up to 12 people.

This is what is covered:

  • The foreign exchange market
  • Currency risk
  • Spot dealing
  • Currency pairs, base currency and quotes
  • What affects the spot rate
  • Forward foreign exchange
  • How the forward rate is derived
  • Forward points and outright quotes
  • How and why forward foreign exchange is traded
  • Foreign exchange swaps
  • How and why foreign exchange swaps are used
  • Foreign exchange risk -  how it can occur
  • Non deliverable forwards – what they are and how they work

Enquire or book this course

 

Related Documents

Registration RequiredNon Deliverable Forwards 100% relevant

18th August 2011

Non deliverable forward (NDF) What is a non deliverable forward? It is a forward foreign exchange contract but instead of there being physical delivery at maturity of the currency pair the counterparties settle the transaction by a single net payment in the convertible currency. This payment represents the profit or loss on the trade. NDFs are used when a currency is not freely convertible. That is where the authorities only permit the exchange of the domestic currency through the central bank at an official spot rate. The proceeds of which may then be taken out of the country. If an exporter invoices in a non-convertible currency the invoice amount will eventually need to be sold (normally for USD) through official channels. As a result of the fluctuation of the spot rate the exporter may receive more or less USD than expected and is therefore subject to currency risk. This risk can be hedged with a NDF. Let's look at an example:


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Registration RequiredMarket Guides > Spot & forward foreign exchange 41% relevant

12th October 2009

Introduction Foreign exchange is defined as "a claim to a foreign currency payable abroad and may be funds held, bills or cheques". A foreign exchange transaction is, "a contract agreed today between two parties to trade an agreed amount of one currency for an agreed amount of another currency on a future date". When you travel you may be familiar with buying currency at the airport. Because the sums involved are small and paper money is exchanged the differences between buying and selling prices can be wide. You may also be unfortunate enough to pay a dealing fee. Banks, corporates and speculators deal in the professional market. Trades are transacted across electronic platforms and each trade can run into millions of dollars. As a consequence dealing spreads are very narrow and the money is exchanged by credits and debits to bank accounts. Let's find out about the spot and forward markets and the risks involved.


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Learn about the following: How the spot market works. What the spot price is. What happens when you do a deal. How the forward rate is calculated. How dealers make money. Why customers are important.


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