Benjamin Richard D Brown#41

翻訳の表示

What is a forex swap and how is it used in practice?

A forex swap involves exchanging principal and interest payments in one currency for those in another, often used by institutions and corporates. Unlike simple spot or forward contracts, swaps can last months or years, managing long-term exposures. For example, a U.S. company with euro revenue may swap into USD funding to hedge currency mismatch. Benefits: tailored hedges, efficient funding. Risks: complexity and counterparty exposure. Retail traders indirectly experience swaps via overnight rollover fees on leveraged positions. Swaps show how forex is not just about speculation—it underpins corporate and institutional treasury management worldwide.