Learn about Forex - Types of FX Trade
Welcome to the third in this short FX Education series, aimed at introducing new investors to the basic concepts of FX trading. In this edition, we describe the basic types of FX trade.
What is Spot?
A spot FX trade is an immediate execution of one currency against another at an agreed rate, settlement of which traditionally takes place two business days later. GTS TradeStation offers spot trading on streaming real-time prices for over 150 different currency crosses, with deep liquidity on the most liquid currency pairs.
In the FX Trade module, if the Bid/Ask fields are highlighted green, then the platform is delivering a live-tradable price.
What is a Forward Outright?
A Forward Outright is a trade that will commence at an agreed upon date (in the future). There is no centralized exchange for Forwards and forward trading is often customized to meet the needs of the buyer and seller. Forward Outrights are expressed as a price above (premium) or below (discount) the spot rate. The forward FX price is the sum of the spot price and the margin. This price is a reflection of the FX rate at the forward date where if the trade were executed at that rate there would be no profit or loss.