What are the Main Financial Instruments in Forex Markets?
Several financial instruments are used in forex markets to facilitate currency trading and risk management:
Spot Transactions: Immediate exchange of currencies at current market rates. Forward Contracts: Agreements to exchange currencies at a predetermined rate on a future date. Options: Contracts that give the buyer the right, but not the obligation, to exchange currency at a specified rate before a certain date. Futures: Standardized contracts to exchange currencies at a specified rate on a future date, traded on exchanges. Swaps: Agreements to exchange currency streams over a specified period.