<t>Because basis swaps have blown out and credit risk/ counterparty funding is such a big issue, you cant really use money market instruments anymore to replicate forward rates.Traders now manage fx swaps as per inventory management and mainly bookrun their positions.If you have reuters, use a broke...

<t>When you say variable notional FX Forward, does the buyer own any optionality in the notional delivered under the forward on the expiry date?Usually that is built as a OTM foward + vanilla option and the entire structure is marketed as a "zero-cost solution"Otherwise, if it is just a quanto forwa...

I think long-only funds do not just drive prices up- like any other normal investor they have trading limits; stop losses etc. so they would all be herding to rush for the door to unwind long positions when the market tanks.

<t>One main benefit is the legal right to force the counterparty to unwind the trade as this may be triggered by loan covenants, credit limits or the bank might just have revised its credit limits (which all banks are doing - usually downwards unfortunately), especially with Basel III.The other vers...

From my limited knowledge,It is just a basket option (long and short FRAs in the 2 ccys) or a call option on the spread (FRA(CCY1) - FRACCY(2)).purely an interest rate product as you only need an option on the forward pointsEarly exercise suboptimal - better to sell the option than draw down.

Collar = cylinder = risk reversal = buy and sell OTM put and call.extendible collar = client sells the right to be extended into a r/r to finance an ITM upfront collar.typical corporate hedging structure

<t>Your problem might be easier to solve if you break down the knock-in option into the vanilla and the one touch.Using the following Forward - {RKO Call - KNO Put} = Knock In ForwardA Knock-In forward is the same as being long and short one-touches to pay/receive the underlying/cash.You would need ...