FXtehingud

FXtehingud refer to foreign exchange transactions, the buying and selling of currencies in the global foreign exchange (FX) market. The market operates over the counter (OTC) and is the largest financial market in the world by traded value. It includes spot trades, forwards, futures, options, and swaps. Spot trades typically settle in two business days (T+2) and involve the immediate exchange of currencies at the prevailing market rate. Forwards and futures are contracts to exchange a specified amount of currency on a future date, enabling hedging or speculation on exchange rate movements. FX options provide the right, but not the obligation, to exchange currencies at a set rate. Swaps combine notional exchanges and interest rate differentials, used by institutions to manage funding and risk.

Market participants include banks acting as market makers, multinational corporations hedging payment streams, hedge funds and other institutional traders, and retail traders through brokers and platforms. The market is characterized by high liquidity in major currency pairs such as EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, and AUD/USD, with prices driven by supply and demand influenced by macroeconomic data, central bank policy, geopolitical developments, and risk sentiment.

Trading is conducted primarily OTC through networks of banks and brokers, with some activities on futures and options exchanges. Settlement and clearing involve systems like CLS to reduce settlement risk. Regulation varies by jurisdiction, with oversight from bodies such as the ESMA in the EU, the CFTC and NFA in the US, and local financial authorities, and requires KYC/AML controls and capital requirements.

FXtehingud are essential for international trade, investment, and risk management, but carry significant currency risk and leverage-related considerations for participants.