Glossar

A foreign exchange long position in FX forward markets is a commitment to buy a specified amount of one currency against payment in another currency at a fixed future date, known as the value date, at a specified exchange rate. Typically, a foreign exchange long position offsets a corresponding ‘short’ position that a company takes when it agrees to buy goods for delivery at a future date. In effect, such a foreign exchange long position enables the company to convert a short underlying position to a zero net exposed position, with the forward contract receipt cancelling out the corresponding account payable.