Anabasis
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409Course · Professional

Foreign Exchange

The largest market on earth.

The Course

The FX market is the largest on earth and among the least understood by household investors. This course teaches the mechanics, interest-rate parity, and the hedging problem at the firm level.

You will finish able to read a currency pair quote and price a forward from spot and rates.

Outcomes
  • 01

    Read a currency pair quote.

  • 02

    Explain interest-rate parity.

  • 03

    Hedge a currency exposure at a firm level.

Prerequisites
  • — 401 — Public Markets helpful.
Pacing

1 week · ~2 hours.

  • IModule · ~2 hours.

    The market

    OTC, 24-hour, and its participants.

    OTC, 24-hour, and dominated by institutions. The market's structure shapes every retail interaction with it.

    What You Will Be Able To Do
    • — Read a currency pair quote.
    • — State interest-rate parity.
    • — Price a forward.
    Why here

    IRP is the arbitrage constraint that determines forward pricing everywhere.

    1. 01Currency pairs and quotesArticle12m
    2. 02Interest-rate parityArticle12m
A Note from the Faculty

Every international investor is implicitly a currency trader. Better to know it than not.