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Foreign exchange derivatives

What is forexrebate cashback forexdonesia Forex rebate king derivatives Foreign exchange derivatives are a kind of financial contract, foreign exchange derivatives usually refers to foreign exchange trading instruments derived from the original asset whose value depends on one or more underlying assets or indices, the basic types of contracts include forwards, Forexrebateking, swaps (swaps) cashbackinforex options Foreign exchange derivatives also include forwards, futures, swaps (swaps) and options in one or The basic features of foreign exchange derivative products The basic features of foreign exchange derivative products trading are: margin trading, that is, as long as you pay a certain percentage of the margin can be traded in full, without actually transferring the principal, the end of the contract is also generally carried out by means of the settlement of differences, only in the maturity date to physical delivery of the performance of the contract will require the buyer to pay the full amount of goods Therefore financial The lower the margin, the greater the leverage effect, the greater the risk The basic types of foreign exchange derivatives Foreign exchange derivatives are a kind of financial derivatives mainly include: (1) foreign exchange forward contracts Foreign exchange forward contracts are the agreement between the two parties to buy or sell a certain amount of financial products at a certain price on or before a certain date in the future Foreign exchange forward contracts are the longest history of financial derivatives, and the simplest way of trading. The transaction is the simplest one, but also the basis of several other basic derivative products in recent years, the rapid development of a new product is the forward interest rate agreement (2) foreign exchange futures foreign exchange futures is developed on the basis of commodity futures, is a form of financial futures foreign exchange futures is a commitment to buy or sell a financial asset at a specific time in the future standardized contract its quantity, quality, delivery time are already determined The only change is the price of the foreign exchange futures contract trading object for a variety of currencies foreign exchange futures trading principles and commodity futures trading principles, are the use of futures prices and spot price fluctuations convergence, futures contracts near delivery, futures prices and spot prices will tend to be the same characteristics of the spot and futures two markets on the variety, quantity, delivery period, and the opposite direction of the transaction, in order to in one market The main characteristics of foreign exchange futures trading: trading is a standardized contract trading; trading is margin trading; foreign exchange futures market is a tangible market; trading implements the membership system and daily settlement system; participants are hedgers and speculators foreign exchange futures trading in the hedging transaction method and general commodity period is Hedging methods are basically the same, the basic method can be used long hedging and short hedging two methods (3) currency options Currency options are a rights contract, refers to the buyer after paying a certain fee (called option fee), enjoy the right to buy or sell a financial asset at an agreed price on an agreed date or within an agreed period of time according to the rights of the buyer, options can be divided into call options and put options. The former refers to the buyers right to buy a certain financial asset at an agreed price, while the latter refers to the right to sell a certain financial asset at an agreed price (4) Currency Swap A currency swap is a transaction in which two parties agree to exchange a certain amount of two currencies at a certain exchange rate, and at the expiration of the agreement, both parties exchange their respective currencies at the same rate. During this period, both parties pay interest to each other according to the amount exchanged As the gold innovation activities continue, on the basis of the traditional currency swap, there are many new swap methods, mainly: forward swap, index swap, cartel swap, breakable swap, expandable swap, etc. The main activities of the foreign exchange derivatives market involve currency swap, currency futures and a mixture of the above transactions from the financial From a financial perspective, currency futures transactions are closely linked to the global capital markets, as are interest rate swaps. The uniqueness of the foreign exchange derivatives market is that the prevalence and liquidity of foreign exchange derivatives depends to a large extent on exchange rate fluctuations, which affect the cost of raising capital abroad and the return on international portfolio investments. The basic functions of foreign exchange derivatives are in three areas: (1) hedge and manage systemic financial risk According to statistics, the systemic risk accounts for about 50% of the investment risk in the financial markets of developed countries, preventing systemic risk is the top priority of risk management for financial institutions Traditional risk management tools such as insurance, asset-liability management and securities portfolios are unable to (2) Enhance the overall risk resistance of the financial system Financial derivative products have the function of risk avoidance and transfer, which can transfer the risk from individuals with weaker tolerance to individuals with stronger tolerance, and transform the financial risk into a strong impact on enterprises with weaker tolerance. (3) Improving economic efficiency This mainly refers to improving the efficiency of enterprise operation and financial market efficiency, the former is reflected in providing enterprises with better tools for avoiding financial risks, reducing financing costs and improving economic efficiency. The latter is reflected in as many as 20,000 kinds of products to greatly enrich and improve the financial market system, reduce information asymmetry, achieve a reasonable distribution of risk, improve pricing efficiency, etc. Foreign exchange basic derivative products trading mechanism Foreign exchange derivative products of the most basic four types a. Foreign exchange swap transactions: the parties to sign a swap contract agreed to exchange assets regularly within a certain period of time ii. Foreign exchange option transactions: option contracts may allow the contract holder to buy/sell in the future at a price determined today, and is still a power, not an obligation III, foreign exchange futures transactions: the buyer or seller of a futures contract submits a margin at the beginning of the transaction, as a cushion mechanism after the price change margin based on changes in the contract price, timing adjustments IV, foreign exchange forward transactions: similar to futures, but no The risk and reward of foreign exchange derivative transactions Foreign exchange derivative products can be hedged to protect the value of speculation can also be profitable, can reduce the risk can also suffer from risk, this unique duality makes the derivative products are difficult to control; therefore, foreign exchange derivative products have risk and reward Chinas foreign exchange derivative transactions now and the future The spot market is not developed and perfect, hedging demand because of risk awareness is still very small, the derivative transactions of the present and the future. The current policy orientation of foreign exchange derivative transactions in China is to adhere to the principle of limited pilot
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