FX forwards (or STIR) desks
those of you who work in FX, can you pls chime in? thx
which banks have FX forwards / STIR desks (both G10 and EM) that...
1. focus mainly on prop/directional bets instead of market-making
2. are very profitable and well-respected on the street, who know their shit and are most likely/able to jump to a directional risk taking position on the buyside
is it also safe to assume that the better the bank is at flow (JP Deutsche Barclays), the fewer directional bets they will look at, because most of their time is spent servicing the clients and making prices?
thx!!
FX forwards =/= STIR...
Isn't fx forwards just non-usd denominated STIR?
STIR is Short-Term Interest Rate futures.
On our floor, FX Forward is every outright FX transaction that's not T+2 (spot), and is handled by our STIR desk.
Obviously we don't have the strict definition that STIR = STIR Future contract here. It's merely the name of our short end rates trading group.
Bump...anyone?
To answer your question there's this thing called the Volcker Rule which makes giving you a straight answer difficult. Prop activity in these products is probably concentrated in bank treasuries nowadays, and even those groups are at risk after what happened in JP Morgan's CIO.
Your flow vs. directional question is misguided. 'Flowmonsters' in these products are naturally exposed to some directional risk in the course of their market making activities. If anything, the biggest banks are the ones likely to have more room to spare for prop activities. Just because your franchise is weak doesn't mean you should open a prop book.
fx forwards (Originally Posted: 05/21/2016)
When entering into an FX fwd, if we buy the base or variable currency are we basically "borrowing" in that currency? It makes more sense to me that we would be "lending" since the fwd rate seems to compensate the holder of the lower yielding currency. For instance, if EURUSD fwd has positive points, the holder of the Euro leg is receiving less in interest so at maturity, they should be faced with a more favorable exchange rate. Based off of that logic, I feel buyer of Euros now to sell them forward is "lending" due to the receiving of interest. If anyone could help that would be great.
Think of it like this: holding everything else equal, if EUR rates fall instantaneously, what will be the PNL on your FX fwd position?
the new forward rate would have even greater positive points added considering were buying Dollars forward...Im not sure how PNL is calculated however. I would assume that the PNL is the difference between the forward rate you agreed to and the most recent one??
Risks of trading FX Forwards, Swaps, NDFs (Originally Posted: 02/28/2018)
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Hey harveydent, the following topics might be helpful:
If we're lucky, the following pros may have something to say: Ashley-Flynne albyterzi85 ollie
You're welcome.
What ECNs can institutional investors trade FX forwards and FX options on? (Originally Posted: 11/06/2015)
I know Thomson Reuters has both FX options and FX options and I think Currenex has FX forwards but I cant find any info on 360T, ADS, Tradebook, FXall, Hotspot, etc. Anyone have any info?
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