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Sir i’m not able to understand whether the opening transaction should be buy or sell? pls explain with an example?
If the underlying transaction is buying the currency in which the contract size is quoted, then we buy futures. If it is selling the currency in which the contract size is quoted then we sell futures.
I explain this, with examples, in my free lectures on foreign exchange risk management.
Hello Sir. Please is there any difference between interest rate futures and currency futures? I don’t really know the difference and I take most of the questions as interest rate futures. Can you please give me a quick illustration of both? Thank you.
1 clarification Mr. John. My question above was not the right question. Sorry for the mistake. I rather wanted to ask about Swap and an illustration of both. Thanks.
Currency swaps in the exam are rarely asked, and when they are they are essentially interest rate swaps. I explain both in my free lectures and work through an example of an interest rate swap in my lectures.
The only recent example in the exam of a currency swap was a question called Buryecs in the June 2017 exam. You can find my replies to queries about his question by using the search box on the top bar of this page 🙂
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