Forex Swap

In finance, a forex swap (or FX swap) is a simultaneous purchase and sale, or vice versa, of identical amounts of one currency for another with two different value dates (normally spot to forward).

Structure

A forex swap consists of two legs:

. a spot foreign exchange transaction, and
. a forward foreign exchange transaction.
These two legs are executed simultaneously for the same quantity, and therefore offset each other.

It is also common to trade forward-forward, where both transactions are for (different) forward dates.