It is a continuous of buying and selling of identical sum of one currency for another but in two different date.Let’s make sample, you trade USD/JPY. You want to buy USD with your JPY, but you do not even have JPY. So, you need to borrow buy it, and you will used your margin as warranty for that loan. Okay, now you can buy USD using JPY. Since you borrow JPY, you have to pay the interest of that loan with last rate till you paid back the loan or with other word you closed your trade.Since you buy USD, you are being paid interest since you hold it. The differences between how much you pay and how much you collect interest, it will be called swap.
Finally, the end of forex swap are leave the investor with a long position with one currency which considers positive and have longer interest of investor based on movement of forex market and short position for other currency.The decision to closed the transactions depend on the traders
therefore , so important to keep good event that makes the currency rate in it is line, and not move so volatile.
Finally, the end of forex swap are leave the investor with a long position with one currency which considers positive and have longer interest of investor based on movement of forex market and short position for other currency.The decision to closed the transactions depend on the traders
therefore , so important to keep good event that makes the currency rate in it is line, and not move so volatile.
