FX

Spot and forwards, carry, interest-rate parity, intervention and FX options.

1. X1The FX marketTurn foreign money into pounds, see how a moving exchange rate changes a company’s profit, and know what a forward does.7 min
2. X2Quotes, pips and two-way pricesRead a currency quote, know which price a client deals at, and work out what a move in pips is worth.8 min
3. X3Value dates and settlement riskWork out when an FX trade settles, and name the risks between agreeing a trade and being paid.8 min
4. X4Cross ratesWork out the exchange rate between two currencies from their dollar rates, including its bid and offer.7 min
5. X5Spot positions and P&LWork out the profit or loss on a currency position, report it in pounds, and size a position from its stop-loss.7 min
6. X6Forwards and covered interest parityWork out a forward exchange rate from today’s rate and two interest rates, and say which currency trades at a discount.9 min
7. X7FX swaps, funding and carryUse an FX swap to borrow one currency against another, work out what rolling a position earns, and see what a carry trade risks.9 min
8. X8FX optionsName an FX option, work out what it costs and where it breaks even, and say when a company would pick one over a forward.9 min
9. X9What moves currenciesExplain why a currency moved: interest rates, inflation, what a country sells, fear in markets, or the authorities stepping in.9 min