Forward foreign exchange refers to foreign exchange transactions conducted on a specific date in the future, which can be divided into forward foreign exchange purchased in advance and forward foreign exchange sold in advance.

Second, advantages

Avoidable exchange rate risk

Lock in the cost of capital or profit

Third, how to engage in forward foreign exchange transactions?

Commitment target: those who have foreign exchange business dealings with banks, have actual foreign exchange receipts and payments needs, and have no bad records of deposits, loans or foreign exchange transactions in the last year. You must deal with forward foreign exchange transactions.

Documents to be attached: commercial transaction documents or documents approved by relevant departments. The same transaction may not

Repeat the contract at other banks.

The amount of each commitment does not exceed the amount of foreign exchange receipts and payments, excluding the first settlement of foreign exchange or foreign exchange payable.

The net amount that can be settled by selling or buying shall prevail.

Performance bond: all business departments of the bank shall negotiate with customers themselves.

Contract term and delivery date: the delivery date can be a fixed expiration date or an agreed period.

Pricing basis:

Forward points = spot exchange rate x (quoted currency interest rate-quoted currency interest rate) x period

Forward exchange rate = spot exchange rate plus forward points

Trading practice:

Quotation currency and quotation currency: quotation currency is the currency used to measure the price of other currencies.

, its pricing unit is 1, that is, 1 quotation currency = X (how much) quotation currency, and the exchange pays.

The transaction amount of e-commerce is subject to the quoted currency amount.

Fourth, examples:

Someone 1 month's income 1 million dollars, and it is predicted that1month's payment1million dollars.

In case of currency devaluation, Party A may sign a forward foreign exchange contract with the bank.

Suppose the spot exchange rate is 32.30 and the one-month forward point is 0.0 1 (NTD and USD).

One-month spread), the contract exchange rate is 32.31(32.30+0.01= 32.31),

If the dollar depreciates to 32.00 a month later, exchange losses can be avoided.

US$ 65,438+0,000,000 x (32.0-32.30) =-NT$ 300,000.

In forward foreign exchange transactions, there are generally several trading methods, namely:

Direct forward foreign exchange trading: refers to trading directly in the forward foreign exchange market without corresponding trading in other markets. Banks usually don't quote the forward exchange rate in full, but use the difference between the forward exchange rate and the spot exchange rate, that is, the basis point quotation. The forward exchange rate may be higher or lower than the spot exchange rate.

Forward foreign exchange trading based on options: companies or enterprises usually don't know the exact date of their foreign exchange income in advance. Therefore, options can be traded with banks in foreign exchange, that is, within a certain period of time after the transaction, they will give enterprises today's concerns:

China was sentenced to the largest anti-dumping case "industrial injury established" ...

The mobile phone tariff policy is expected to be liberalized in 2004. ...

The "black broker" absconded from Capital Securities and became the defendant. ...

Hiro? tell

, such as the right to execute forward contracts within 5-6 months. Forward foreign exchange transactions combining spot and forward. Forward trading quotation

In forward foreign exchange transactions, foreign exchange quotation is more complicated. Because the forward exchange rate is not the realized exchange rate that has been delivered or is being delivered, but the forecast of future exchange rate changes based on the spot exchange rate. We will introduce it in the later analysis of difficulties. Expression of basic terms

In forward foreign exchange transactions, you can often see many technical terms, which make beginners very confused, so it is necessary to understand these terms here.

Premium: When the forward exchange rate of a currency in the foreign exchange market is higher than the spot exchange rate, it is called premium. For example, in the spot foreign exchange market, the exchange rate of the US dollar against the German mark is 1: 1.75, and the exchange rate of the US dollar against the German mark for three months is 1: 1.7393. At this moment, Mark rises in the water.

Discount: When the forward exchange rate of a currency in the foreign exchange market is lower than the spot exchange rate, it is called discount. For example, in the spot foreign exchange market, the exchange rate of the US dollar against the German mark is 1: 1.7393, and the exchange rate of the US dollar against the German mark for three months is 1: 1.75. At this point, Mark is very attentive.

Arbitrage exchange rate: the value relationship between two currencies usually depends on their respective exchange rates against the US dollar. For example, 1 GBP =2 USD, while 1.5 DM = 1 USD, then 3 DM = 1 GBP, and the exchange rate between two non-USD is called the arbitrage exchange rate.

Spot foreign exchange transactions refer to foreign exchange transactions that are delivered on the second banking day after the transaction is completed. The delivery date is the value date. If the value date is not a bank business day or holiday, it will be postponed. The exchange rate of spot foreign exchange transactions is called spot exchange rate.

We can also conduct foreign exchange transactions with the transaction amount of the same day and the transaction amount of the same day and the amount of the next day according to the customer's requirements.

Difference between spot foreign exchange trading and RMB arbitrage

Spot foreign exchange trading of RMB arbitrage in the project

The transaction amount exceeds US$ 50,000 (including US$ 50,000) or the equivalent in other foreign currencies. The amount of each transaction is less than $50,000 or equivalent in other foreign currencies.

The use of exchange rate refers to the real-time quotation of exchange rate in the international foreign exchange market, which changes with the fluctuation of exchange rate in the international foreign exchange market. The bid-ask spread is often smaller than the RMB arbitrage spread. Converted according to the RMB settlement and sale price of the day, the price is one day. The bid-ask spread is often greater than the spot foreign exchange bid-ask spread.

function

Spot foreign exchange trading is the most basic form of foreign exchange trading. It mainly has the following three functions:

Spot foreign exchange transactions can meet the temporary payment needs of customers. Through spot foreign exchange transactions, customers can instantly exchange one foreign currency in their hands for another foreign currency to handle foreign exchange settlement such as import and export trade, bidding and overseas project contracting. Or repay foreign exchange loans. For example, if a company needs to repay a foreign bank's USD loan of 6.5438+0 million on Wednesday, and the company holds Japanese yen, it can buy 6.5438+0 = 654.38+0.00 yen from our bank on Monday and sell Japanese yen at the same time. On Wednesday, the company delivered 65.438+30 billion yen to our bank by transfer; At the same time, we will deliver USD 6,543,800+to the company, which can remit USD to repay the loan.

Spot foreign exchange trading can help customers adjust the currency structure of foreign currency in their hands. If a company follows the principle of "don't put all its eggs in one basket" and adjusts 15% of its total foreign exchange from US dollars to euros and 10% to Japanese yen through spot foreign exchange transactions, it can spread foreign exchange risks through this combination.

Spot foreign exchange trading is also an important tool for foreign exchange speculation. This kind of speculation may bring huge profits as well as huge losses.