The emergence of premium in international trade shows the relationship between forward exchange rate and spot exchange rate: the forward exchange rate is higher than the spot exchange rate, which means premium, and vice versa. The analysis is as follows:

Exchange rate refers to the price relationship between two commodities. Generally speaking, in China, the rise of exchange rate means the appreciation of foreign currency (more valuable), while the depreciation of local currency.

The exchange rate fluctuates constantly. It's August, and RMB: USD =7.99. In September, RMB: USD =7.89, which means that the forward exchange rate of RMB goes up (more valuable) or the forward exchange rate of USD goes down (the depreciation of USD).

What do you mean by premium and discount?

Premium means that the forward exchange rate is higher than the spot exchange rate. In direct quotation, the premium represents the depreciation of the local currency. On the contrary, under indirect pricing method, premium represents the appreciation of local currency.

Discount means that the forward exchange rate is lower than the spot exchange rate. In direct quotation, discount means appreciation of local currency. On the contrary, under the indirect pricing method, discount means the depreciation of the local currency.

What do you mean by premium and discount in foreign exchange?

Premium refers to the rise of exchange rate, that is, the depreciation of local currency and the appreciation of foreign currency, and discount refers to the decline of exchange rate, that is, the appreciation of local currency and the depreciation of foreign currency.

The simple memory is that the exchange rate rises and falls and the local currency depreciates and appreciates in the opposite direction.

For example, the spot exchange rate of RMB against the US dollar is 6.5 pairs 1, and the forward exchange rate after three months is 6.3 pairs 1. This is a discount. The RMB has appreciated against the US dollar.

Note that this is on the premise of direct quotation.

What does the premium between spot and futures mean?

In the futures market, if the spot price is lower than the futures price, the basis is negative, and the forward futures price is higher than the recent futures price. This situation is called "futures premium", also known as "spot discount", and the part where the forward futures price exceeds the recent futures price is called "premium". If the forward futures price is lower than the recent futures price and the spot price is higher than the futures price, the basis is positive, which is called "futures discount" or "spot premium", and the part where the forward futures price is lower than the recent futures price is called "futures discount". In the foreign exchange market, according to the delivery time of foreign exchange transactions, exchange rates are divided into spot exchange rates and forward exchange rates. When determining the forward exchange rate, the trend of the exchange rate is analyzed to determine whether it is rising or falling. If the forward exchange rate is more expensive than the spot exchange rate, it is a premium, otherwise it is a discount, and the corresponding rising and falling prices are the premium amount and the discount amount. Under direct pricing: forward exchange rate = spot exchange rate+premium number (-discount number) Under indirect pricing: forward exchange rate = spot exchange rate-premium number (+discount number) The premium number can be expressed in terms of amount or points.

What is a premium?

Let me give you an example. In fact, promotions and discounts are formulated to balance possible deviations in actual combat. Take the spot apple tray as an example. If the first-class fruit is higher than 55% at the time of delivery, the 20 yuan/ton per height will increase by 1%. If the first-class fruit is less than 35%, the first-class fruit 1% will be discounted to 20 yuan/ton. To put it bluntly, Apple's rating is more than the stipulated Dan, and it is almost less.

Explain what futures premium means?

3m means that the premium of futures in March is rising, and the premium of futures is falling. It's that simple.

The exchange rate premium and currency premium are 15 points.

There is nothing wrong with the saying that "the currency with high interest rate will appreciate immediately and depreciate later". If the high interest rate currency is the benchmark currency, it is the exchange rate premium; If the high interest rate currency is the quotation currency, it will not be the exchange rate premium. This case has nothing to do with local currency and foreign exchange.

Exchange rate can be understood as price. When the exchange rate rises, the price will rise.

There are two main ways to express the exchange rate: one is based on how much local currency the unit foreign currency is converted into, that is, direct quotation, for example, China's 100 USD =637.35 RMB. In this way, the rise of exchange rate means that the unit foreign currency is converted into more local currency, that is, the local currency depreciates; The other is how much foreign currency the local currency is converted into, which is called indirect pricing method. Under this representation, the rise of foreign exchange rate means the appreciation of local currency. Most countries in the world quote directly, so there is no special explanation. The direct purchase price is the default purchase price, and the exchange rate rises to the depreciation of the local currency. Generally speaking, the exchange rate refers to the conversion of foreign currency into RMB.

What does copper premium mean?

Premium and discount: the difference between forward exchange rate and spot exchange rate is expressed by premium, discount and flat price. Premium means that the forward exchange rate is higher than the spot exchange rate, while the discount is the opposite. In general, the currency forward exchange rate with higher interest rate is mostly discount, and the currency forward exchange rate with lower interest rate is mostly premium.

Discount refers to the phenomenon that the quoted currency interest rate is higher than the quoted currency interest rate, and premium refers to the situation that the quoted currency interest rate is lower than the quoted currency interest rate.

Give an example of discount:

If the price of GBP/USD is 1.5030/40. The exchange points are arranged in a way of large left and small right. The two-way interest rates for overnight borrowing of sterling are: 4.00% (deposit) and -4.25% (loan) respectively. The two-way interest rate of overnight dollar borrowing is: 2.25% (deposit) and -2.50% (loan). rule

1, buy GBP/USD. The exchange points calculated in the above example are-0.63;

2. The calculation method of selling GBP/USD is as follows:

1.5030× (2.25%-4.25% )×1day /360 days =-0.000083.

That is, the exchange point is -0.83.

Therefore, the overnight exchange point of GBP/USD is 0.83/0.63 basis points.

This is the professional usage of discount in the market.

Examples of premium are:

If the price of USD/CHF is 1.66 10/20 (the order of exchange rate points is small on the left and big on the right). The three-month two-way US dollar interest rates are 2.25% and -2.50% respectively. The two-way interest rates of three-month Swiss francs are 4.75% and -5.00% respectively. rule

1. When selling dollars and buying Swiss francs, the overnight exchange point is calculated as follows:

1.6610× (3.75%-2.5% )×1day /360 days.

That is 0.58 basic points (pip).

2. When buying dollars and selling Swiss francs, the overnight exchange point is calculated as follows:

1.6620× (5.00%-2.25% )×1day /360 days =0.000 127.

That is 1.27 basic points (pip).

Therefore, the overnight exchange point of USD/CHF is 0.58/ 1.27 pips.

For personal speculation, you may be more concerned about the premium in spot foreign exchange transactions. Generally speaking, foreign exchange transactions in the international foreign exchange market are regarded as spot transactions unless a date is specified. At present, the real-time quotation systems in the two major electronic financial markets in the world are REUTERS (Reuters) and SeeWaa (World-China Financial News) of Moneylin Gong. The foreign exchange rate it quoted is the spot exchange rate. If the delivery date of the buyer and seller is not the spot date, the exchange rate must be adjusted to reflect the interest rate difference between the two currencies, so the exchange rate on a specific date will be different from the spot exchange rate.

What do you mean by oil premium?

Premium refers to determining whether the forward exchange rate is rising or falling by analyzing the exchange rate trend. If the forward exchange rate is more expensive than the spot exchange rate, it is a premium, otherwise it is a discount, and the corresponding rising and falling prices are the premium amount and the discount amount.