| Mark to Market Cross Currency Swaps - Initial Exchange |
|
|
|
|
|
tarangini
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 23 Jan 2010
|
| Mark to Market Cross Currency Swaps - Initial Exchange |
 |
|
I understand in case of cross currency swap ,principal is exchanged on effective date and maturity date.
If it is a spot trade(ie,difference between trade date and effective date < 2 business days), we already know the exact variable currency amount thats going to be paid/received due to the fact that exact variable currency amount(ie,equivalent to constant currency amount) for most of the currency pair is determined 2 business days prior to the effective date.
If it is not a spot trade(forward) starting some time in future(ie,difference between trade date and effective date > 2 business days), we would not know the exact variable currency amount(ie,equivalent to constant currency amount) on the trade date due to the fact that it is determined 2 business days prior to the effective date.
Here are my questions relating to the above.
Can traders agree to the exact variable currency amount on the trade date(ie,variable currency amount equal to constant currency amount at the time of trading) itself even though it is a forward trade(ie,difference in trade date and effective date > 2 business days ) instead of determining the variable currency amount 2 business days before effective date ? If yes,what is it known as?
|
Sat Jan 23, 2010 7:23 am |
|
|
lestertarry
New Member
Cash: $ 1.20
Posts: 6
Joined: 30 Aug 2012
|
Initial exchange for money make good impact but the currency swap some times make the low return is well. So overall swapping makes the great difference is well..
|
|
Thu Aug 30, 2012 10:22 am |
|
|
|
