Foreign Exchange: FX Swaps Trading

Foreign Exchange: FX Swaps Trading

Intuition Publishing Pty Ltd
Updated Sep 24, 2020

A foreign exchange swap is the simultaneous exchange of one currency for another at spot and the opposite exchange for settlement on a day in the future. The swap price is the difference between the two exchange rates used, reflecting an earning or cost to the caller or price taker. The cost and earnings for market makers in swap transactions is examined, and we discuss what can happen to the swap points should interest rates move.