Value Date Definition. A Value Date, or maturity date is the date on which counterparties to a financial transaction agree to settle their respective obligations by exchanging payments and ownership rights. The typical Value Date for a Spot forex trade is two business days. A Spot Trade in Forex is a purchase or sale of a foreign currency in the Spot Market at the Spot Rate for immediate delivery or delivery “on the spot”, as opposed to a date in the future. Spot contracts are typically cleared and settled electronically. A Spot Trade in foreign currencies is typically transacted with a “2-day value date”, an international convention due to time zone differences and the need for banks to communicate cross-border to perform the transaction. Occasionally a “1-day value date” can be achieved when the complete trade is near or within the same time zone, as with USD trades for the Canadian Dollar of the Mexican Peso. If a position is left open overnight, a forex broker will typically reset the value date two business days out by closing and reopening the position at the same price, thereby preventing the actual delivery of currency to take place. The Spot Market accounts for nearly 35% of the total volume exchanged on the foreign exchange market.
Forextraders' Broker of the Month
ForexTime (FXTM) is an award-winning platform that certainly has the feeling of being set up by people who know what they are doing. The firm demonstrates an understanding of what helps traders make better returns, and its success can be measured by the fact that it's doubled the number of clients it supports in recent years. The fact that the broker has grown to have more than two million accounts suggests it is getting things right for clients.