Value Date
The date on which counterparts to a financial transaction agree to settle their respective obligations; the date a transaction’s value goes into effect. It is also commonly called the maturity date.
Related terms
Settlement Date
The date on which the transfer of funds in a transaction takes place.
Read full definitionMaturity Date
The date a debt instrument such as a note, draft or bond becomes due, as quoted on its certificate. It can also refer to the expiration date of futures and options contracts or the date an instalment loan must be fully repaid.
Read full definitionTransaction Date
The date on which a trade occurs.
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Spot Rate
The current market exchange rate at which one currency can be bought or sold for immediate delivery. Spot trades typically settle two business days later (T+2).
Read full definitionForward Contract
An agreement to exchange a set amount of one currency for another at a fixed rate on a future date. It locks in today’s rate, protecting a business from adverse currency moves before a payment falls due.
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The simultaneous purchase and sale of the same amount of a currency for two different value dates, typically a near leg at spot and a far leg forward. It is used to roll a hedge forward or manage short-term cash-flow timing.
Read full definitionCurrency Pair
Two currencies quoted against each other, such as GBP/USD. The first is the base currency and the second the quote currency; the price shows how much of the quote currency one unit of the base is worth.
Read full definitionBid-Ask Spread
The difference between the price at which the market will buy a currency (bid) and the price at which it will sell (ask). A tighter spread means lower transaction costs.
Read full definitionPip
The smallest standard increment by which a currency pair moves, usually the fourth decimal place (0.0001). Pips are the common unit for quoting spreads and price movements.
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