A swap is financial agreement between two parties to exchange cash flows in different currencies. With a foreign exchange swap, you can trade currencies with the bank for a set time. You agree to buy or sell a certain amount of foreign money to the bank and then do the opposite later at set exchange rates. For example, you can change extra foreign money into another currency or adjust the date of a previous trade.
An FX Roll is a special type of FX Swap. It lets you change the date you settle an open FX Forward position. Like an FX Swap, an FX Roll has two actions that happen at the same time. One cancels the original FX Forward trade on the first settlement date, and the other sets a new date.
Using an FX swap helps you avoid sudden changes in exchange rates, giving you more certainty about future payments or receipts.
This tool is helpful if there is a delay in receiving money, or if you need to pay sooner than expected. FX Roll transactions can be used for open FX Forward contracts through the Franx platform. On Franx, you can choose the trade for which you want to change the settlement date, and Franx will show you the current rates for the new date.