Hi there, Just curios if anybody knows how spot fx and rollover works in the interbank market - that is when hedge funds are trading FX spot on margin. Do they use rollover at all ? or do they only trader non spot fx like a 3 month forward etc.? It seems to me that only retail traders, trade spot fx, that is rolled over - but I may be mistaken? Thank you.
Rolled daily, in general, though sometimes traded to term (perhaps to a CME date). Indicative forward points are available on BBG and elsewhere. Google "spot next" and "tom next".
Cash balances are rolled daily, as a rule, as the previous poster says, unless there's a specific reason to do something different.
Depending on the holding period of the fund if it is short term they trade spot and do tom-next swaps every day if long term then they trade spot and roll forward to imm dates (3 months, etc...)