Foreign exchange hedge

A foreign exchange hedge is a type of financial derivative, which gives companies a means of eradicating, or “hedging”, their cash flows against foreign exchange risk. The most popular hedging…

Foreign exchange hedging strategy

A foreign exchange hedging strategy is a concept referring to the rules and procedures followed by investors and international businesses to protect their profit margins from foreign exchange volatility…

Foreign exchange line of credit

A foreign exchange line of credit is a type of loan extended by a bank to an individual or a business in order to cover foreign exchange obligations. More…

Foreign exchange long position

In financial vocabulary, a long position or the expression “to go long on a certain asset” means to buy – and hold – that specific asset in the expectation that…

Foreign exchange market

The foreign exchange market (also known as the FX market or forex market) is the largest marketplace in the world, with a daily volume of USD5 trillion in operations. The…

Foreign exchange netting

In general terms, netting refers to the practice of consolidating two different settlements in order to create a single value. When companies incur a loss in a particular business line,…

Foreign exchange opportunity cost

The foreign exchange opportunity cost is a concept in currency management, associated with currency forward contracts, financial instruments used by international businesses to offset their exchange rate risk. The foreign exchange opportunity…

Foreign exchange outright rate

The foreign exchange outright rate is a concept in currency management, associated with forward contracts, financial instruments which offset exchange rate risk. In foreign exchange, the various types of forward…

Foreign exchange payment default

Payment default is a concept referring to a party’s failure to meet its contractual obligations to make a specified payment at a specified date. In foreign exchange, a payment default often…

Foreign exchange risk (FX risk)

FX risk is the danger of losing investment value due to changes in exchange rates. It is also known as currency risk or exchange rate risk. More info

Foreign exchange risk management strategy

Foreign exchange risk management strategy or FX hedging strategy are terms used to define all the measures devised by businesses or investors to protect the value of their cash flows,…

Foreign exchange short position

In finance, a short position or the expressions “short selling” or “going short” mean to sell a specific asset, that might be owned or borrowed, normally, with the expectation that…

Foreign exchange SWAP/FX SWAP

An FX swap, or foreign exchange swap, (also known as currency swap,) involves two simultaneous currency purchases, one on spot and the other through a forward contract, and is designed…

Forex trading platforms

A foreign exchange trading platform is a software programme that allows businesses and investors to buy and sell currencies on the foreign exchange markets during FX market opening hours, normally…

Forward contract

In the foreign exchange market, a forward contract is an agreement that gives you today’s exchange rate on established settlement date in the future. These contracts are a simple, yet highly…