Advanced
Directional forward trades and realistic costs
A forward can express a directional market view, but the trade begins at the forward rate rather than the spot rate on a news screen.
Read articleFOLITIC / FORWARDS TRADING GUIDE
Forwards Trading Guide
Understand forward contracts, interpret quotes and build currency, commodity and portfolio hedges. Follow ten stages from contract basics to advanced valuation, execution and disciplined risk management.
Start with What a forward contract commits you to, then follow the next lesson links. Explore 40 lessons with worked examples, exercises and further reading.
Explore the learning path
Browse by topic
Trading and Relative Value · All lessons
Trading and Relative Value
Investigate directional positions, carry, basis and maturity relationships.
Advanced
Carry returns and the risk behind them
Currency carry can produce income in quiet markets and losses during sharp exchange rate moves. Forward points are part of the entry economics, not guaranteed profit.
Read article
Advanced
Cross currency basis and limits to arbitrage
A gap from textbook interest parity can reflect scarce funding, balance sheet costs and market segmentation. It is not enough to compare two attractive screen rates.
Read article
Advanced
Comparing tenors roll costs and curve trades
Different maturities embed different funding periods and risks. A curve trade is a position in their relationship, not simply two opposing trades that cancel.
Read article