Latest / The Trading Floor with David Axtell
Forward Contracts – Locking in Tomorrow's Rate Today
You know what exchange rate you're getting today. But what about the payment due in ninety days?Episode 9 opens Part Three of The Trading Floor — forward contracts. The instruments that let corporations, investors, and institutions lock in a future exchange rate today. David Axtell explains them the way he'd explain them to a new colleague on the desk: from the ground up, with no shortcuts and no jargon without context.He starts with the problem. A European manufacturer importing raw materials from the United States has a ten million euro payment due in three months. At today's spot rate of…
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