Forward points: Difference between revisions
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The spot foreign exchange quote is adjusted by applying, for example, the one-month forward points to it, to calculate the full one month forward foreign exchange quote. | The spot foreign exchange quote is adjusted by applying, for example, the one-month forward points to it, to calculate the full one month forward foreign exchange quote. | ||
'''Example''' | |||
If the spot foreign exchange quote is: | |||
GBP 1 = 1.6000 - 1.6010 USD | |||
Then the one-month forward exchange quote is | And if one-month forward points are 5-8 (rising). | ||
Then the one-month forward exchange quote is: | |||
GBP 1 = 1.6005 - 1.6018 USD. | GBP 1 = 1.6005 - 1.6018 USD. | ||
Revision as of 14:39, 16 March 2015
Forward points (for example one month forward points of 5-8) are a conventional short-form method of quoting multiple forward foreign exchange rates, by reference to the related foreign exchange spot quote.
The spot foreign exchange quote is adjusted by applying, for example, the one-month forward points to it, to calculate the full one month forward foreign exchange quote.
Example
If the spot foreign exchange quote is:
GBP 1 = 1.6000 - 1.6010 USD
And if one-month forward points are 5-8 (rising).
Then the one-month forward exchange quote is:
GBP 1 = 1.6005 - 1.6018 USD.
