TOM NEXT Meaning and
Definition
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"Tom next" is a financial term that refers to the additional interest payment or the swap rate charged on an overnight foreign exchange (forex) transaction. It is the rate at which a forex position is rolled forward from one day to the next, also known as the "tomorrow-next rate" or "tn."
In the forex market, currencies are traded in pairs, and each currency pair has an associated interest rate known as the "swap rate." The swap rate reflects the difference in interest rates between the two countries whose currencies are being traded. When a forex position is held overnight, the trader incurs financing costs or earns interest based on this difference.
"Tom next" is specifically the interest rate charged or earned when rolling over a currency position from the current day (today or "tom") to the next day ("next"). It is typically calculated based on the tom-next swap points, which represent the difference between the two-day forward rate and the spot rate.
This interest rate is important for forex traders and market participants who engage in overnight positions, as it affects the overall cost or benefit of holding a position. It plays a crucial role in carry trades, where traders seek to profit from the interest rate differential between two currencies.
In summary, "tom next" refers to the interest rate charged or earned when rolling over a forex position from the current day to the next day. It is a key determinant of financing costs or interest income in overnight forex trading.
Common Misspellings for TOM NEXT
- dome next
- rom next
- fom next
- gom next
- yom next
- 6om next
- 5om next
- tim next
- tkm next
- tlm next
- tpm next
- t0m next
- t9m next
- ton next
- tok next
- toj next
- tom bext
- tom mext
- tom jext
- tom hext
