Swap

Definition

The simultaneous purchase and sale of the same amount of a given currency for two different dates, against the sale and purchase of another. A swap can be a swap against a forward. In essence, swapping is somewhat similar to borrowing one currency and lending another for the same period. However, any rate of return or cost of funds is expressed in the price differential between the two sides of the transaction.

Forex Word of the day

Delta
The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative. Also referred as the "hedge ratio".
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