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elearning > Spot & forward foreign exchange

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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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Course Summary

Foreign exchange menuForeign exchange spotForeign exchange deal

Foreign exchange forwardForeign exchange forward 2Foreign exchange speculation

  • 30 minutes
  • 8 question multiple choice
  • 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

Spot & Forward Foreign Exchange - the details

 1. The spot market

  • The spot rate
  • Trade date
  • Value date
  • Price quotation, bid and offer
  • How much a dealer makes
  • Direct and indirect quotes

2. The forward market

  • Definition
  • How the forward rate is determined
  • Example, calculating the forward rate
  • Arbitrage constraints
  • Forward points, premium, discount, application to spot

3. The importance of customers

  • How dealers make money from customer deals
  • How dealers “run” customer deals
  • Customer orders, limit, stop loss

4. Summary

5. Test

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