Foreign exchange cash market - sport FX market

11 important questions on Foreign exchange cash market - sport FX market

All transactions done at current cash price and in which settlement

Spot segment

Which spot currency trade only takes 1 day?

USD/CAD

Credit Risk reduced on settlement date spot trades:

  • Payment vs payment
  • correspondent bank
  • bilateral net compensation
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5 most actively traded currencies:

  1. USD
  2. EUR
  3. GBP
  4. JPY
  5. CAD

2 most traded currency pairs:

  1. EUR - USD
  2. USD - JPY

Market intervention based on expectations with an aim at generating profits from risk exposure

Speculation

Market intervention with no underlying expectations

Arbitrage

Market intervention based on reducing or eliminating risks

Hedging

Opening long or short positions aimed at profiting from increases or decreases in prices

Speculating

Opening a long and simultaneously a short position and it generally does not imply use of own funds

Arbitrage

Contrary positions so that losses compensate gains

Hedging

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