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Example ILS/USD. Forward = Spot +Swap points. Spot rate = 4.1653/4.1753 Swap points 1 M = 84/105 Forward rate 1M =4.1737/4.1858. Roll over a Forward. Getting the same spot rate for the close of the previous forward and for the opening of the new one and adding the swap points for 1 month. - PowerPoint PPT Presentation
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Forward = Spot +Swap points
Example ILS/USD
Spot rate = 4.1653/4.1753
Swap points 1 M = 84/105
Forward rate 1M =4.1737/4.1858
Roll over a Forward
Getting the same spot rate for the close of the previous forward and for the opening of the new one and adding the swap points for 1 month
Example
The company will sell the $ at the spot
Bid price=4.1653
The company will open a new forward to April 19
The forward rate= The spot of the sell + swap points
4.1758 =Fwd=4.1653+0.0105
On January 1st. A company bought a forward contract on the USD/ILS to March 19.
On March 19 the company decided to roll over the forward to April 19.
Cross rate - ExampleSpot ILS/USD 4.1653/753
Spot USD/EUR 0.8946/51
Spot ILS/EUR 3.726/37
Swap points 1 M ILS/USD = 84/105Swap points 1 M USD/EUR = -0.14/1.57Swap points 1 M ILS/EUR = 72.52/89.59
Forward rate 1 M ILS/USD = 4.1737/858Forward rate 1 M USD/EUR =0.8946/52Forward rate 1 M ILS/EUR = 3.733/45
Cross rate
Buy Euro sell ILS = Sell ILS Buy USD, Sell USD Buy Euro 0.8952* 4.1858= 3.747
A company wants to buy a forward on the Euro/ILS
3.745 , Buy a Euro forward /ILS
0.8952 , Buy a Euro forward /USD
4.1858 , Buy a USD forward /ILS