A Foreign Exchange Primer [Hardcover]

This book will provide a thorough introduction to the foreign exchange markets, looking at the main products through to the techniques used, coverage of the main participants, details of the various players, and an understanding of the jargon used in everyday dealings. Written in a concise and accessible manner, it will be an ideal introduction for anyone looking to become involved in the FX markets, from dealing rooms or sales perspectives, to novice investors.

The new edition has been updated to reflect the changes that have taken place in the industry over the past few years. Most chapters have been enhanced and this new edition now features new material on the psychology of trading, the psychology of price movement and online trading.Disclaimer ix

1 Introduction 1

PART I MARKET OVERVIEW 7

2 A Brief History of the Market 9

3 MarketOverview 25

4 Major Participants 33

5 Roles Played 43

6 Purposes 45

PART II FOREIGN EXCHANGE PRODUCTS 49

7 Spot Foreign Exchange 51

8 Forward Contracts 59

9 Short- and Long-Dated Contracts 69

10 Broken-Dated Contracts 73

Glossary of Terms for Chapters 7 to 10 77

11 Non-Deliverable Forwards 81

12 Foreign Exchange Swaps 91

13 Currency Swaps 95

14 Foreign Exchange Options 99

15 Picturing Profit and Loss of Options 117

Glossary of Terms for Chapters 14 and 15 133

16 Foreign Exchange Futures 137

17 Exchange for Physical 145

PART III ESSENTIAL KNOWLEDGE 149

18 Foreign Exchange Dealing Rooms 151

l8