Today, LTG Goldrock to share with you what is the risk of swap transactions and exchange transactions ~
Converse transactions refer to a behavior of interchangeable debts of the same currency and debts of different currencies through financial intermediaries .In exchange of transactions, another typical financial market innovation business after financial futures appeared in the early 1970s.
The exchange transaction has developed from the aspect of quantity to quality, and even formed the inter -market trading market.In this market, the parties to exchange transactions have proposed certain swap conditions, and the other party can immediately undertake with corresponding conditions.The use of swap transactions can be raised according to the restrictions on different interest rates, foreign exchange or capital markets in different periods. Therefore, from a certain perspective, the exchange market is the best fundraising market.SCT transactions not only add new preservation tools to the financial market , but also open up a new situation for the operation of the financial market.
Market language
(1) Multi -head and short
Based on the following methods, define the interchange between the two parties in the market (Market Positation):
The side of the fixed interest of expenditure: It is called Short Market, which is profitable when interest rates rise; (considering interest rate futures , when interest rates rise, futures prices fall and short profit).
The party that obtains fixed interest: called the market bulls, when the interest rate rises, loses; (considering interest rate futures, when interest rates rise, futures prices fell and bullish losses).
(2) Valent
Swap spread = Swap Rate -Benchmark Treasury Yield)
Multi -price difference : Equivalent to Long Treasury and Pay Fixed
Polymor
risk
1.Acrosser of exchange transaction risk
①The parties to the contract.In exchange transactions, they have to bear the original debt or new debt and actually perform debt exchange.
② Intermediary bank.It acts as an intermediary role in the funds of both parties to the contract.
③ Trading preparatory.His responsibilities are to arrange the overall rules of exchange transactions, decide the exchange conditions for each person, and mediate various disputes.It is not a person in the contract. It is generally held by investment banks, merchant banks or securities companies. It is charged (one -time) a certain amount of exchange arrangements, usually 0.125%to 0.375%of the total.
2.Types of swap transaction risk
① Credit risk
② Government risk
③ market risk
④ Do not correspond to the risk of income and expenditure
⑤ Settlement risk
