Forward Signed Electronically Currency with airSlate SignNow

Forward signed electronically currency

in currency forward contracts underlined is obviously the currency rate or exchange rate to understand currency forwards you need to understand how the exchange rates are coated for example assume that you are an Australian and Australian dollar is your domestic currency and you want to trade Australian dollar against US dollar see if one u.s. dollar is equivalent to one point three Australian dollar then how they write the exchange rate they write the exchange rate in this manner they will put domestic currency in numerator and foreign currency in denominator aut 1.3 over USD this is domestic and this is foreign to make it simple to understand foreign currency is set at 1 and we see that how many Australian dollars we need to buy one foreign currency now see the exchange rate from the perspective of the currency forward contract so just like other contract this is one currency forward contract formed on 38 December one party is long another party is short expiry is six month 38 June 19 and this is the rate they have coated this is the underlying and the line is what Australian dollar over USD and this is the forward price they have quoted 1.3 Australian dollar is equivalent to 1 USD dollar so in the denominator is the foreign country and in the numerator is the domestic currency now for some of the student it sounds really confusing that when you're buying one currency you are selling another currency always remember we will see long which is buyer and seller which is called short from the perspective of foreign currency long will buy USD 1 for 1 point 3 Australian dollar and short will say USD 1/4 1.3 dollar it means if anyone is buying USD then he and she must be selling Australian dollar ok so if anyone wants to buy foreign currency then he and she should enter as a long position long position means buying foreign currency and selling domestic currency and opposite is true for short position short position mean selling foreign currency and buying Australian dollar domestic currency the de currency exchange rate when you are buying one currency then you have to sell another currency to exchange it and just like other contract this exchange rate will be compared to the market exchange rate at the end of the expiry date and at the execution date to see which party is in profit