A foreign exchange (FX) spot transaction, also known as FX spot, is an agreement between two parties to buy one currency against selling another currency at an agreed price for settlement on the spot date. The exchange rate at which the transaction is done is called the spot exchange rate.
An FX forward is an agreement to purchase or sell a set amount of a foreign currency at a specified price for settlement at a predetermined future date, or within a predetermined window of time.
Use the Foreign Exchange Spots/Forwards window to enter spot trades or your forward foreign exchange deals. You can enter several different types of spot or forward deals:
Standard: Foreign exchange deal between your company and a counterparty.
Swap: Foreign exchange swap.
Contra Company: Foreign exchange deal between your company and another company.
Subsidiary: Foreign exchange deals between your company and its subsidiaries.
You can also use the Quick Deals window to quickly enter several spot and forward deals at the same time. See: Quick Deals.
Create standard spot or forward deals to track foreign currency deals between your company and a counterparty.
In the Dealer field, choose the foreign exchange dealer.
In the Company field, choose the company for the deal.
In the Counterparty field, choose the other party for the deal.
If you want to create a contra company deal, choose a company from the list of values.
If you want to create a standard spot or forward deal or a swap deal, choose a counterparty from the list of values.
If you are making the deal on behalf of a client, in the Client field, choose the client.
In the Portfolio field, choose a portfolio for the deal.
In the Limit field, choose a limit that you want to apply to the deal.
In the [ ] field, enter the descriptive flexfield information as required. For information on descriptive flexfields, see: Defining Descriptive Flexfields.
In the Deal Subtype and Product Type fields of the Main Details tab region, select a deal subtype and product type for the deal.
In the Value Date field, enter the date on which the exchange of currencies is to take place.
In the Buy Currency field, choose the currency being bought. In the Buy Amount field, enter the amount of currency being bought.
In the Sell Currency field, choose the currency being sold. In the Sell Amount field, enter the amount of currency being sold.
The current system rate for the currency pair entered in the Buy Currency field and Sell Currency field defaults into the Reference Spot Rate field. You can override this rate.
If you are entering a forward deal, in the Forward Points field, enter the forward points for the deal. Forward points are the premium or discount from the current spot exchange rate and are calculated based on the difference between the reference spot rate and transaction rate.
In the Transaction Rate field, enter the spot or forward rate for the deal.
Note: If you enter any two values for the calculation (reference spot rate, forward points, or transaction rate), the system calculates the third rate.
In the Additional Details tab region complete the following fields as required.
Company Buy Account: Choose the company account that you are using for the buy currency.
Company Sell Account: Choose the company account that you are using for the sell currency.
Pricing Model: Choose the pricing model that you want to use to value the deal. The pricing model chosen overrides the default pricing model for the deal type, subtype, and product type combination.
For information about other foreign exchange or money market deals that are related to your foreign exchange spot or forward deal, see the Related Deals tab region.
If you used a broker for your foreign exchange spot or forward deal, complete the fields in the Brokerage tab region.
Save your work.
To view a list of your foreign exchange quick input deals, choose the Review Quick Inputs button. For more information on foreign exchange spot or forward deals using the Quick Deals window, see: Quick Deals.
Use the Swap Deal window to enter foreign exchange swap deals.
When you swap your spot or forward deals, you enter the first leg of the deal completely using the steps described in Entering Standard Spot or Forward Deals (see: Entering Standard Spot or Forward Deals).
After you enter the first leg of the deal, but before you save the deal, choose the Create Swap button to enter the second leg of the deal. Some information for the second leg of the deal is automatically populated based on the deal information you entered previously. Use the Swap Deal window to edit the details for the second leg of the deal as needed.
Enter the first leg of the swap deal using the steps described in Entering Standard Spot or Forward Deals. See: Entering Standard Spot or Forward Deals.
To create the second leg of the swap deal, choose the Create Swap button. The Swap Deal window appears. The following fields are automatically populated based on the information entered for the first leg of the deal: Deal Subtype, Value Date, Buy, Buy or Sell Amount, Sell, Buy Acct Num, Sell Acct Num, Reference Spot Rate, Counterparty Account, and Pricing Model.
In the Facility Limit field, select a limit for the deal.
In the Sell or Buy Amount field, enter the amount of currency sold or bought or enter the rate to automatically calculate the missing amount.
If the second leg of the swap is of subtype Forward, enter the forward points for the swap in the Forward Points field.
In the Transaction Rate field, enter the rate for the second leg of the swap deal.
Note: If you enter any two values for the calculation (reference spot rate, forward points, or transaction rate), the system calculates the third rate.
In the Internal Comments field, enter comments about the deal as needed.
Choose the Done button to close the Swap Deal window.
Save your work.
Use the Contra Company Deal window to enter into a spot or forward deal with another company. When a Contra Company Deal is created, both companies involved in the transaction will be able to post this deal in their respective ledgers.
Enter the deal details using the steps described in Entering Standard Spot or Forward Deals. See: Entering Standard Spot or Forward Deals.
To enter the contra company details for the deal by choosing the Create Contra Company button. The Contra Company Deal window appears. The following fields are automatically populated based on the information previously entered: Dealer, Buy Currency, Sell Currency, Buy Account, Sell Account, and Pricing Model.
In the Portfolio field, choose a portfolio for the deal.
In the Sell Acct Num field, choose the contra company account from which you are selling currency.
In the Facility Limit field, choose a limit for the deal.
In the Comments field, enter comments about the deal as needed.
Choose the Done button to save your work.
Use the Multiple Subsidiary Deals window to enter multiple spot or forward deals between your company and its subsidiaries when you conduct an open market transaction on behalf of your subsidiaries.
Enter the deal details using the steps described in Entering Standard Spot or Forward Deals. See: Entering Standard Spot or Forward Deals.
To create multiple subsidiary deals, choose the Create Subsidiary button. The Multiple Subsidiary Deals window appears.
In the Party field of a blank row, select the subsidiary with whom you are entering into the deal. The default buy and sell currencies for that subsidiary automatically appear in the Buy and Sell fields.
In the Buy Amount or the Sell Amount fields, enter either the buy amount or the sell amount for the deal.
Enter the rate for the deal. The amount that you did not enter earlier is automatically calculated and populated in the appropriate Amount field.
In the Limit field, choose a limit for the deal.
Repeat steps 3 through 6 for each deal you want to enter.
Choose the Done button to save the deals.
If you need to enter spot or forward deals frequently and the deal details are available in an electronic source such as a bank file or a third party application, you can use the XTR_DEALS_INTERFACE table and the Deal Interface Summary window to import the deal details into Treasury. For more information, see: Importing Deals into Treasury.
Use the View Spots/Forwards window to view the details for a single spot or forward deal.
In the View Foreign Exchange Spot/Forwards window, query a deal that you want to view.
To view the history of the selected deal, choose the Contract History button.