FX forwards / forward points

An FX forward is a commitment to exchange an agreed amount of two currencies at a future date. An FX forward will have a different exchange rate to the spot rate and the difference in the two rates is the forward points. Forward points are the time value adjustment made to the spot rate to reflect a future date. Forward points are mathematically derived by the prevailing interest rate markets.

How Hedgebook helps:

Hedgebook is used to record, report and value FX forwards. The valuation of an FX forward clearly shows the spot rate and forward rate that is used in the calculation.

Related blog posts:

Calculating FX forward points