Transaction characteristics

(1) buying and selling are consciously carried out at the same time.

(2) buying and selling in the same currency and the same amount.

(3) The delivery period of buying and selling is different.

Swap trading is different from spot trading and forward trading mentioned above. Spot and forward transactions are single, either spot transactions or forward transactions are not carried out at the same time. Therefore, it is usually called a single foreign exchange transaction, which is mainly used for foreign exchange transactions between banks and customers. Swap transactions involve spot transactions and forward transactions or simultaneous transactions, so they are called compound foreign exchange transactions, which are mainly used for foreign exchange transactions between banks. Some large companies also often use swaps for arbitrage activities.

The purpose of swap transactions includes two aspects: one is to smooth out foreign exchange positions and avoid the risks brought by exchange rate changes; The second is to make use of the exchange rate differences in different delivery periods to make profits by buying cheap and selling expensive.

trade